Some headlines from our recent global asset allocation team (GAAT) meeting:
1. Go International for Government Bond Exposure
Overweight international government bonds versus the US remains a strong theme based on our expectation for continued US growth improvement. We’ve seen almost straight line underperformance for US Treasurys versus global government bonds, yet find it hard to identify a catalyst for a reversal at this time.
2. Bullish on the Dollar
Yes, the US dollar has had a big run against the major currencies and may be due for consolidation. However, we believe cyclical trends, valuations and interest rates still favor the dollar.