Bill Gross said Treasurys will draw support from investors seeking alternatives to near-zero yields abroad, aiding the market as the Federal Reserve raises interest rates.

Treasurys fell a second day Monday, with the 10-year note yield rising to the highest level in a month. U.S. government securities dropped Friday after a Labor Department report showed that U.S. jobs growth was strong enough to maintain wagers of tighter policy from the Fed this year. The extra yield U.S. 10-year notes offer over their German peers widened to the most since December, based on closing prices.

JPMorgan Chase & Co. lowered its forecast for how far U.S. yields will rise this year. Economists predict the European Central Bank will cut its deposit rate, which is already below zero, when it meets on March 10.

“It’s not just what the Fed might do, but it’s the comparison relative to global markets” that will drive Treasurys, said Gross, who built the world’s biggest bond fund at Pacific Investment Management Co. and is now at Denver-based Janus Capital Group Inc. “Global markets, no doubt, are pulling down U.S. rates,” Gross said in an interview on Bloomberg Television on March 4.

Gross’ Janus Global Unconstrained Bond Fund has returned 0.4 percent in the past year, beating 85 percent of its competitors, according to compiled by Bloomberg on its institutional class of shares.

Benchmark Treasury 10-year yields climbed four basis points, or 0.04 percentage point, to 1.91 percent as of 6:06 a.m. New York time Monday, according to Bloomberg Bond Trader data. That’s the highest yield since Feb. 2. The 1.625 percent note due in February 2026 fell 10/32, or $3.13 per $1,000 face amount, to 97 14/32. The yield on German 10-year bunds dropped three basis points to 0.20 percent, widening the yield spread between the securities to 171 basis points.

“A more benign backdrop seems to be favorable to all markets,” said Steven Major, HSBC Holdings Plc’s head of fixed-income research, in an interview on Bloomberg Television’s “On The Move” with Guy Johnson. He said the Fed is looking at all available “financial markets and real economy data from all around the world,” and going by that it is “very hard to see how the Fed is going to hike as aggressively” as some in the market have priced in.

HSBC’s Major forecasts Treasury 10-year yields will fall to 1.50 percent by the end of the first quarter this year, 1.40 percent by the second quarter and then rise back to 1.50 percent until the end the year.

The probability the Fed will raise interest rates this year is about 68 percent, futures prices compiled by Bloomberg indicate. The U.S. central bank will leave the upper end of its target band for the federal funds rate at 0.50 percent when it meets March 15-16, according to 50 of the 60 economists surveyed by Bloomberg. The remaining 10 forecast it will increase the figure to 0.75 percent.

Bond prices indicate investors expect the Fed to raise its own rate once in the coming year, Gross said.

Yield Climb

U.S. yields climbed on March 4 after a government report showed employers added more jobs in February than economists projected. Average hourly earnings, a gauge of inflation, unexpectedly fell.

The figures taken together point to an improving economy, said Kim Youngsung, head of overseas investment in Seoul at South Korea’s Government Employees Pension Service, which as $12.5 billion in assets.

“Wages were a little bit disappointing, but the numbers we got are pretty good,” he said. “That is why there was a negative impact on Treasury bonds. Probably we will get a higher inflation rate compared to last year.” Ten-year yields may rise to a range of 2 percent to 2.50 percent over the course of 2016, Kim said.

JPMorgan sees U.S. 10-year yields rising to 2.15 percent by Dec. 31, lowering its forecast from an earlier prediction of 2.45 percent.

Investors are becoming more concerned about how long the economic expansion will last, and their appetite for risky assets is low, JPMorgan’s Alex Roever and Kimberly L. Harano wrote in a report March 4. The New York-based company is one of the 22 primary dealers that trade directly with the Fed.