The US Treasury market will be closely watched this week as investors consider if the risk premium for the world’s “safe asset” is in the process of resetting high. A possible warning sign: the 10-year yield rose sharply last week despite growing concerns that US economic growth is slowing. The flight-to-safety trade, which usually benefits Treasuries and the US dollar, was conspicously absent in recent days. “The market is re-assessing the structural attractiveness of the dollar as the world’s global reserve currency and is undergoing a process of rapid de-dollarization. Nowhere is this more evident than the continued and combined collapse in the currency and US bond market as this week comes to a close,” Deutsche Bank strategist George Saravelos wrote in a note to clients Friday.
