Summary
US and China: balancing the decoupling
China: pressure before parley
US and China: managing a deteriorating relationship
US and China: balancing the decoupling
Strategy Views
What to expect for the US Treasury market?
President Trump’s tariff announcements have rattled the previously dominant US financial markets, putting pressure on Treasury yields amid fears of slower growth and rising inflation. Recently, the difference in yield that investors expect for holding Treasuries compared to swaps has increased significantly, signalling a perceived higher risk of holding Treasuries.
What to expect for the US Treasury market?
Global Investment Views
Trade war complicating the Fed’s job
Extreme policy uncertainty in the US is leading to sharp movements and increased volatility. Recent bond yield dynamics signal a shift from seeking safety in US assets to a reassessment of Treasuries and the USD as ultimate safe havens. While we think it is too early to question the trust in US assets, we also think any challenge to the Fed’s independence and so much policy uncertainty could undermine investor confidence. For instance, the perceived risks around capital outflows and some repositioning in the markets caused the recent divergence between US yields and dollar.
Global Investment Views - May 2025
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