[ngkent]

Treasuries have rallied as leveraged investors (like me) search for any kind of positive cash flow to pay off their liabilities...It took a while for it to catch up with US Treasuries because they were so low in the wake up the recent recession but if you look at bonds across the spectrum (ie Bank Debt, Junk Bonds, Investment Grade Corps, Euro Bonds) we have yields fall to unheard of levels. Luckily some of that is unwinding (Junk Bonds) but nonetheless it goes back to supply / demand before interest rate arbitrage, currency arbitrage, interest rate parities come into play...The fact remains there in NOTHING to invest in now on a macro scale that will provide a decent return giving the current economic environment and with so much money chasing yield, yields will eventually fall until something happens...be that good or bad.