Expensive Dollars And The Return Of Negative Hedged Yields

Late last week, hedged Treasury yields turned negative for European and Japanese investors, a state of affairs that garnered quite a bit of attention as these things go, despite being the clear result of quarter-end effects. The 3-month EURUSD X-Ccy basis fell 25bps on Thursday, the largest one-day move since 2009 (see below) and similar action unfolded in the 3-month USDJPY basis. (Bloomberg) Here's the hedged yield for European and Japanese investors: (Bloomberg) This is obviously dow

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