Unequivocal flows of money back into china spell out higher bond yields in the us
Investors need to be alert about two things in 2017: the exit of previous ‘flight capital’ from US assets and the stance of Chinese monetary policy. The former determines the prospects for the US dollar and the latter prospects for global bonds and EM. Latest data, which confirm China’s PBoC is not tightening but 'flight capital' is clearly flowing back into China, reinforce our 2017 predictions that the US dollar has peaked and that G7 bond yields are progressively rising. Find out more here.