EFTA01387573

Begin forwarded message: From: Torsten Slok < Date: March 1, 2018 at 9:42:09 AM EST To: undisclosed-recipients:; Subject: DB: Foreign demand for US credit weakening When the ECB introduced negative interest rates in 2014 many European and Asian investors started buying US rates and also the next-door neighbor to US rates namely US IG. With higher US Treasury yields, rising hedging costs, a falling dollar, and signs that the ECB will end QE in September foreign demand for US credit is slowing, see chart below. Expect this to continue going forward. Happy to discuss further, let your DB sales contact know. ECB exit and higher US Treasury yields leading to less demand from abroad for US IG S billion 30 - 20 - 10 - 0 -10 - -20 - -30 Net foreign purchases of US corporate bonds I When ECB put interest rates negative in 2014 the rest of the world started buying US credit... S billion 30 25 - 20 15 10 ...with ECB signaling QE exit foreigners are now net seners of US credit 10 11 12 13 14 15 16 17 -10 Deutsche Bank Research So- t.° aft 108 Let us know if you would like to add a colleague to this distribution list. Torsten Stoic Ph.D. Chief International Economist Managing Director Deutsche Bank Securities 60 Wall Street New York, New York 10005 CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0090563 CONFIDENTIAL SDNY_GM_00236747 EFTA01387573