EFTA Document EFTA01387762

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 1G $ billion 30 - 20 - 10 - 0 -10 - -20 - -30 10 11 12 13 14 15 16 17 Source: TreaSUIv, Haver Analytos, DB Global Research 1 Net foreign purchases of US corporate bonds I thltrIfiLilliiiiilpS. z When ECB put interest rates negative in 2014 the rest of the world started buying US credit.. $ billion 30 - 25 \-20 15 10 I - 5 -0 ...with ECB signaling OE exit foreigi b are now net sellers of US credit - -5 - -10 Deutsche Bank Research Tornon Slot tn. 2018 Let us know if you would like to add a colleague to this distribution list. Torsten Slok, Ph.D. Chief International Economist Managing Director Deutsche Bank Securities 60 Wall Street New York, New York 10005 Tel: 108 CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0090902 CONFIDENTIAL SDNY_GM_00237086 EFTA01387762