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In view of analysts at Rabobank, a reversal in lower bond yields seems to be a reflection of market positioning and belief the risks of US-China trade war and a Hard Brexit are over

Key Quotes

“It also backs a firm belief a rate-cutting cycle central banks saw no need for 12 months ago is sufficient to ensure there is no risk of a global economic downturn ahead.”

‘But we beg to differ, as economic indicators do not point to a global recovery ahead despite the recent better-than-expected data in Europe and the US.”

“Consequently, the global economic and bond market recovery will need to come from China – just as has been the case several times since the Global Financial Crisis.”

“But lower Chinese economic growth and, despite its rhetoric to the contrary, a China importing less and less, are a double negative for overall global growth.”

“Together with a potential shift in global policy responses, this likely means a new shift lower in bond yields again soon.”