As President Donald Trump’s trade war threatens to increase the global economy, an interesting divergence has emerged
Bull Run.
The divergence considering is the elevated dividends on the US Treasury that threaten to put together the fiscal problems and the renewed negative flip in the yields of Swiss government bonds.
According to Data Source Pakinomist, Swiss government bonds with maturity of up to five years offered negative dividends at the press time with the two -year dividend of -17.8 basic points. On the contrary, tax chamber is offered tax, yields over 4%.
The divergence is the bond market’s way of telling us that the trade war will have different influences in different countries, depending on their trade profiles.
Those who run profits, such as several European countries and China, will have disinflation or direct deflation, while countries such as the United States that import more than they export will see an increase in price pressure.
Specter of deflation in European nations and China could put pressure on their central banks to facilitate monetary policy aggressively, which probably leads to increased capital installation in alternative investments such as Bitcoin. Both the Swiss National Bank and the European Central Bank have already reduced the rates in recent months.
Meanwhile, analysts have said that higher dividends in the United States and public debt can accelerate the shift away from US assets and to alternative assets.
“The last time this happened [Swiss yields turned negative in late 2019]It preceded coordinated global easing, seizures of the repo-market and ultimately Pandemic-Era QE. Now, it probably reflects a mixture of deflationary pressure, a eurozone infection risks and capital that rotate to monetary sovereignty safe ports in the middle of superb stress elsewhere, “said pseudonym analyst Endgame Macro at X.
It is worth noting that Bitcoin’s Bull race from 2020-2021 from $ 5,000 to over $ 60,000 was characterized by a record amount of negatively returning government debt throughout the world.
