Everything's coming up roses for the global debt market.

Surging inflows into bond funds are soaking up the swelling supply of new notes, flying in the face of speculation that a great rotation in asset allocation — cash flowing into equities at the expense of fixed income — would thwart debt securities this year. That should help anchor borrowing costs for companies and governments around the world even as analysts expect the Federal Reserve to gradually raise interest rates.

Investors added $9.7 billion to global bond funds in the seven days through May 3, bringing year-to-date inflows to $140 billion — a figure that represents about 4% of assets under management — Bank of America Corp. said in a report citing EPFR data. JPMorgan Chase & Co. says that new demand for bonds will likely outpace supply this year.