Although it is still keen to talk about inflation, the global bond market yields still in doubt since the second quarter, the sound has continued to decline. As of September 1, the 10-year bond yields, the United States was 2.5019 percent, from March’s high of 4% to the sharp decline from the post-crisis low of 2.04 percent set in one step; Germany 2.1090 % after the crisis has hit a low; Japan, 1.0170%, was in August 2003 the lowest since; China 3.23%, a rebound after the crisis has been far from the high level of 3.8%.

Unlike the United States is, as the credit squeeze, central bank open market capital return and the recent CPI was significantly go higher factors, China’s bond market over the short-side varieties yield rate from May 2009 onwards will always be in shock move up the situation, since the beginning and long end product was obvious reverse run (which is rare and worth noting), the current one-year bond yields at around 1.85%, further narrowing the spread length. The U.S. bond yield varieties since the short end of Q2 2009, has always sustained concussion falling, and the one-year bond yields in Q2 of this year fell to 0.1995 percent had, is still at a low 0.2404 percent, which the credit is still freezing, moderate the inflationary pressures.

Risk aversion is the main reason

General view, the world’s central banks and governments crisis of mass money into, Jiang Henkuai lead to serious of inflation, and then quickly push the bonds Shouyi rate rose a high level. However, large-scale crisis and global central banks inject money two years later, this situation did not happen. The reason is that people still do not see a significant rise of inflation, but that the subsequent economic recovery, weak, more people are worried about deflation will come.

Recent data showed the U.S. economy in employment, consumer, real estate, Touzi and other fields, Zheng Fu boost has gradually faded, economic Kaozi Shen maintain, long-term potential of its growth Di Yu Shui Ping and signs of exposure Zaidu down, Meilian Chu bluntly 2 times higher than in the past increased the risk of recession. In fact, some of the market’s reaction to earlier, since the second quarter, the U.S., Europe and bond market yields and stock prices have started to decline, and trigger a chain reaction.

For the “inflation” or “deflation”, the market is still in dispute among. However, the initial bet inflation will cause yield rose investors are now recorded larger losses. If the market views on reunification will take some time to build, then increase the risk of real data has already shown.

Therefore, no matter which faction, to avoid the risk of demand has come first.

Hedge funds withdrawal from stocks, commodities and other risky assets back bonds and other fixed income assets is the main reason yields fell. Increased risk of a U.S. recession, China’s economic growth slowed sharply, the Japanese economy are the reason why no improvement. Although recent data quite strong in Europe, it is noteworthy that, from the experience point of view, European economic recovery, or whether it is recession, are half a beat behind the United States. Imbalance within Europe has become even more serious, growth is concentrated in a handful of countries such as Germany, while the debt crisis at the moment calm, the potential risk is still immense.

Can be expected, with the diminished effectiveness of stimulus to promote the recovery of funds will be blocked, the next five years, U.S. economic growth probably only between 1% -1.5% or less.

China’s economic structural adjustment process is bound to will sacrifice some short-term efficiency, such as real estate on the overall economic impact of regulation, coupled with external demand may again shrink, economic prospects are uncertain. Pessimistic view, this will lead to many aspects of risk, but also will encourage the further decline in bond yields.

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