Global Treasury Flow Reversal & Trade Navigator

Macro Regimes & Levers LIVE PARAMS

Macro Regime Scenario

Foreign Outflow Velocity (Annual) 6.5% Percentage of foreign-held US Treasury stock liquidated/run-off per annum

US 10-Year Nominal Yield 4.35%

EUR FX Hedge Cost (Annualized) -2.10%

JPY FX Hedge Cost (Annualized) -5.15%

Substitute Trade Absorption Share 35.0% Proportion of vacated capital actively funneled into target substitute trade

Global Capital Reallocation Ribbon & Impact Surface TREASURY STOCK: $8.20T

Annual Gross Outflow $533.0B Foreign Treasury stock exit run-rate

Substitute Inflow $186.55B Gold & Reserve Diversification

Term Premium Expansion +28.5 bps Domestic private absorption penalty

Foreign Ownership Share 21.8% −1.4% change over 12mo

Cross-Currency FX-Hedged Yield & Carry Matrix US 10Y BENCHMARK

Foreign buyers face severe FX hedging costs (driven by short-term policy rate differentials and cross-currency basis spreads). When net hedged yield slips below home sovereign yields, domestic asset repatriation accelerates.

Jurisdiction / Currency	Nominal US 10Y	FX Hedge Cost	Net Hedged Yield	Local Benchmark	Carry Advantage

The JPY Reversal Dynamic: With JPY FX hedging costs currently around -5.15%, Japanese allocators net -0.80% on US Treasurys versus +1.05% on domestic 10Y JGBs, creating an irreconcilable -185 bps carry deficit that drives sovereign bond repatriation.

Institutional Substitute Trade Strategies SELECT STRATEGY

As foreign institutional investors trim US Treasury duration exposure, capital redirects into these dominant macro strategies. Select a strategy to adjust flow modeling.

Active Target: Gold & Sovereign Reserve Rebalance $186.55B / yr

Central banks (PBOC, Middle Eastern SWFs) redirect US dollar trade surpluses into unencumbered physical gold and bilateral raw commodity settlement to eliminate duration risk, sanctions vulnerability, and sovereign debt issuance dilution.

Sharpe Ratio: 0.82

Duration Risk: 0.0 yrs

Max 12M DD: -7.4%