Europe's largest asset manager starts buying 2-year US Treasuries, betting high oil prices may drag down the US economy.

BlockBeats news, September 14: Amundi, Europe's largest asset management company, is gradually buying 2-year US Treasuries and beginning to close its previous short positions on US short-end interest rates. The institution manages approximately $2.8 trillion in assets, and its portfolio manager Nicolas Dahan believes that rising oil prices and surging financing costs are increasing the risk of a US economic slowdown.

Recently, global bond markets have suffered a sell-off, with the 2-year US Treasury yield briefly breaking above 4.50%, and the 10-year yield surging 19 basis points last week, still near the 5% threshold on Monday. Meanwhile, Brent crude oil broke above $100 per barrel, and European Central Bank rate hikes also pushed the German 10-year government bond yield to its highest level since 2009.

Dahan stated that after the 2-year US Treasury yield rose above 4.50%, its appeal as a safe-haven asset has significantly increased. As core bond yields in developed economies reach more attractive levels, Amundi is gradually reallocating to bonds in mature markets such as the US, Europe, and the UK, and extending portfolio duration.

Dahan believes that the crude oil supply shock, aggressive market pricing of central bank tightening paths, and the recent "capitulation-style sell-off" in the bond market could all become catalysts for a market turn. His judgment is that as the economy comes under pressure, major central banks may not be far from a policy inflection point.