No. of Recommendations: 20
The challenge when considering "inflation" when evaluating relative currency valuations is how universal the rate of inflation will be for the currencies involved and whether that inflation is a domestic variable or, if it implies a shift in relative currency valuations, by how much.
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are there some euro based bonds that can be bought in the US?
FWIW, for those who think there might be an inflation surprise in one or more countries, and/or a big unpredictable move in exchange rates, but DON'T think the US financial system will collapse or be unreliable, the single safest security to own is the US-listed ETF "WIP". It is a basket of inflation protected bonds issued by a wide variety of countries, so no single burst of inflation or currency collapse matters much. To whatever extent you like the reliability of the US dollar, mix in some TIP, which is a basked of US TIPS, US government inflation protected bonds with the only appreciable risks being currency, and potential fudging of inflation metrics.
As with any portfolio of inflation protected bonds, coupons and prices tend to do the reverse things when there is a shift in regime from high to low inflation expectations and vice versa. WIP has had high coupons for a while, but they are falling steadily, while the price return is doing more of the lifting lately in terms of holding purchasing power value. So a chart is a bit misleading at first glance for two reasons: first, it's critical to consider the coupons, and it's important to realize that it's quoted in US dollars so price moves in dollars are the reverse of what the US dollar is doing. The US dollar sank a lot in Q2 2025, so the price of WIP soared measured in US dollars, but in fact it was just holding its value fairly steady in terms of general purpose purchasing power. Overall the US dollar is roughly unchanged in the last 10 years, and WIP has had a positive real return of about 1.9%/year after fees whether measured in US dollars or a basket of others, which is pretty good considering that it's close to being the safest "one click" asset for wealth preservation.
The disadvantage of WIP is that, for non-US persons, there is a 30% US dividend withholding tax, even though the underlying securities are not US source and not subject to withholding tax in their country of issue. You'd do a lot better buying the individual inflation projected bonds, but that's extremely difficult to do. And of course WIP is listed in the US, so it is subject to sponsor and jurisdiction risk, and has fees.
FWIW, just as an example I own some WIP, bought at $31.36 at the start of August. Since then there have been distributions of 0.807 (they are monthly and I missed August's ex-date), net for me after tax of $0.565, so my current breakeven in US dollars is $37.796. Current price is US$39.31, so I'm up 4.0% measured in US dollars. The trade weighted US dollar is down about 1.53% in value in that time, so in real "global purchasing power" terms I'm up about 2.5% in five months. That is better than I'd have done in T-bills, and I've had no dollar exposure risk on the position.
Jim
