EFTA01387762.pdf

To: undisclosed-recipients:; Subject: DB: Foreign demand for US credit weakening When the ECB introduced negative interest rates in 2014 many European and Asian investors started buying US rates and also the next-door neighbor to US rates namely US IG. With higher US Treasury yields, rising hedging costs, a falling dollar, and signs that the ECB will end QE in September foreign demand for US credit is slowing, see chart below. Expect this to continue going forward. Happy to discuss further, let your DB sales contact know. ECB exit and higher US Treasury yields leading to less demand from abroad for US 1G $ billion Net foreign purchases of US corporate bonds $ billion 30 - 30 - 25 20 - \-20 10 - 15 I thltrIfiLilliii ilpS. 0 -10 - -20 - 1 z When ECB put interest rates negative in 2014 the rest of the I -0 -5 ...with ECB signaling 10 OE exit foreigi b - -5 world started buying US credit.. are now net sellers of US credit -30 - -10 10 11 12 13 14 15 16 17 Source: TreaSUIv, Haver Analytos, DB Global Research Deutsche Bank Research Tornon Slot tn. 2018 108 Let us know if you would like to add a colleague to this distribution list. Torsten Slok, Ph.D. Chief International Economist Managing Director Deutsche Bank Securities 60 Wall Street New York, New York 10005 Tel: CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0090902 CONFIDENTIAL SDNY_GM_00237086 EFTA01387762