Lower rates lead trend followers to buy USTs, sell USD: BofA

Bank of America reports that falling rates are driving systematic investors into U.S. Treasuries and out of the dollar. Powell’s dovish Jackson Hole speech boosted demand for Treasuries, with long positions rising in 10-year notes. The dollar is weakening, while investors rotate toward the euro, sterling, and yen. BofA expects selling pressure in German and Chinese bonds, weaker energy and metals positions, and renewed interest in soybeans and related agricultural markets.