RBC: Carry Trades Capping US Treasury Yields

        14:36 EDT - Treasury yields might seem low to US investors, but they continue to rise relative to European yields. RBC Capital Markets chief strategist Jonathan Golub said the spread between the US and German 10-year yields -- last at 2.586% versus 1.450% -- is near its widest since 2006. So he believes the low US yield likely reflects "global carry trades rather than weakness in the US" economy, Golub writes. There's one problem: Cross-border carry trades are usually echoed in currency markets, so if Golub is right, one might expect the euro to be declining against the dollar. But EUR/USD up slightly today and up 2.8% the last three months. (tomi.kilgore@dowjones.com)
        (END) Dow Jones Newswires

        May 02, 2014 14:36 ET (18:36 GMT)