President Donald Trump's sweeping tax cut and spending measure will boost US debt by $3.3 trillion, the nonpartisan Congressional Budget Office estimates, while runaway deficits and swelling debt led Moody's to cut its credit rating in May.

"Definitely I'm concerned about the fiscal deficit expansion," said Toshinobu Chiba, a Tokyo-based rates and credit fund manager for Simplex Asset Management.

Chiba said he has been using futures to shift away from Treasuries and into European debt, but aims to move that trade to the cash bond market when Trump's "big, beautiful bill" passes and inflation expectations tick upwards.

"I think the first options should be Europe, especially the bunds and French bonds, and also Australia and Singapore are options for global investors."

Traditionally a refuge for markets, Treasuries have been volatile since April, becoming less attractive for overseas investors as Trump's erratic policies on tariffs and taxes drove them to pare exposure to the dollar and US markets.

--Reuters--