Long-term interest rates have spiked from historical low levels in anticipation of a strong recovery. With the US ISM Services PMI surging to an all-time high of 63.7 points (previous month 55.3), US long-term interest rates may continue to trend higher. As a consequence of the recent rise in interest rates, US investment grade bonds (duration of around 7-years) have returned -4.5% ytd, while US loans (low interest rate sensitive and Libor based loans) are up +1% ytd. US loans earn currently an average yield of ~4% p.a. in USD.