LIVE MARKETS-No big shift out of US Treasuries by mid-April - BofA

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NO BIG SHIFT OUT OF US TREASURIES BY MID-APRIL - BOFA

A potential flight from U.S. Treasuries and rush into euro area government bonds has been a hot topic since early April, when the U.S. announcement of aggressive tariffs triggered a sharp selloff in U.S. debt.

However, available data through mid-April do not support this view, according to figures compiled by BofA.

"In the first half of April, data pointed to historically strong outflows from U.S. fixed income funds and inflows into German fixed income funds," BofA analysts say.

"But much of this flow was observed in credit and mixed allocation funds; it was about a shift away from U.S. corporate bonds into U.S. and euro area sovereign bonds."

Since January, there have been signs of stronger inflows to European equities.

"So far, flow data and surveys do not reflect major reallocation out of U.S. Treasuries," they add.

"While we did see selling alongside the historic rate volatility in the first half of April, U.S. Treasury funds continued to see inflows, and asset managers repositioned on the curve, as opposed to out of U.S. Treasuries."

BofA most recent Forex and Rates Sentiment Survey, issued on May 9, suggests that the bank has not seen a repositioning in sovereign bond exposure between U.S. and core Europe. While survey respondents are near historic shorts in the U.S. dollar, they have not meaningfully rotated out of U.S. duration.

(Stefano Rebaudo)

EARLIER ON LIVE MARKETS:

DEFENSIVES UP, BANKS STEADY, UK RETAILERS SLIDE CLICK HERE

NERVOUS INVESTORS PUT DOLLAR UNDER PRESSURE CLICK HERE