Asian investors are falling in love with US debt

Asian investors have a yen for Uncle Sam’s debt.

Bond market analysts detect a growing appetite in the unusually quiet coiling trading pattern.

The coiling pattern — or tight trading range — suggests the bond market could jump higher, which in turn suggests bullish factors are about to emerge.

“It’s coiling, so it’s ready to spring upwards,” said one trader. “It’s like a cobra ready to attack,” he told Market News International.

The impetus for this move is the idea that US and China growth will not pull up the rest of the world.

Traders are unwinding the growth trade and moving their cash into safer assets, like US Treasury bonds.

Traders also want to see what will happen next with the US dollar, so they are looking at Japan’s currency.

Some are speculating the Bank of Japan may eventually buy dollars, which then will equate to a need to put those funds into such debt as ultra-safe US Treasurys, which then will push down US rates.