BlackRock prefers European government bonds: the yields are more attractive compared to US bonds.

BlackRock Investment Institute has adjusted its stance on European government bonds from "slightly underweight" to "neutral", citing that their yields are more attractive compared to US Treasury bonds. Strategists including Jean Boivin and Wei Li stated in a report, "We prefer Eurozone government bonds and credit products over US bonds." "Their yields are attractive, and term premia are closer to our expectations compared to US Treasury bonds." Additionally, within the Eurozone, BlackRock has expressed a preference for bonds from peripheral countries such as Italy and Spain. US Treasury bonds had their best month since February last month, but faced selling pressure again in the past week following the release of strong US nonfarm payroll data for June as traders reduced their expectations for a July rate cut by the Federal Reserve. Strategists believe that stubborn inflation will prevent the Federal Reserve from making significant rate cuts. They also believe that high US government deficits may prompt investors to seek more compensation when holding long-term US bonds.