Background on Key Figures and Context
In May, foreign investors purchased almost €100 billion (approximately $116 billion) worth of eurozone debt, according to Citi citing data from the Banco Central Europeo (BCE). This development indicates that euro-denominated assets are gaining traction due to a growing divergence from the U.S. markets.
Donald Trump, the former U.S. President, has had strained relationships with long-time allies over trade and security issues. His attacks on the Federal Reserve have heightened concerns about the safe-haven status of U.S. Treasury bonds this year.
Investment Shifts and Market Impact
The substitution of U.S. assets for European ones has been a significant topic in financial markets in 2025, prompting investors to seek data on the extent of this shift.
U.S. Treasury bond yields have become less attractive due to Trump’s trade announcements, such as the “National Day of Liberation” tariffs on April 2. Meanwhile, eurozone bond yields have remained relatively stable, making them more appealing to investors seeking security.
In April, foreign investors sold $12 billion worth of eurozone debt, possibly due to a widespread risk reduction following Trump’s tariff announcements. However, May saw a reversal with nearly €100 billion in net inflows into eurozone debt with maturities over one year, as reported by Citi using BCE portfolio flow data.
Experts’ Insights and Future Observations
“This could potentially be due to the substitution of dollar-denominated assets,” Citi’s analysts stated in a note to clients on Monday. They will monitor June data, released on August 18, for further insights.
Key Questions and Answers
- What is the main event being reported? Foreign investors purchased nearly €100 billion of eurozone debt in May.
- Who are the key figures mentioned? Donald Trump, former U.S. President.
- Why is this significant? It indicates a growing preference for euro-denominated assets due to divergence from U.S. markets, driven by concerns over the safe-haven status of U.S. Treasury bonds.
- What caused the shift in investment? Trump’s strained relationships with allies and attacks on the Federal Reserve have heightened concerns about U.S. Treasury bonds’ safe-haven status.
- How have bond yields reacted? Eurozone bond yields have remained stable, making them more attractive to investors seeking security. Meanwhile, U.S. Treasury bond yields have increased due to Trump’s tariff announcements.
- What do experts say about future trends? Citi’s analysts will monitor June data for further insights into the investment shift.
