by Michael J. Howell18. March 2016 15:13The US dollar is cracking under pressure from deteriorating fundamentals and maybe a subtle policy co-ordination following the last G20 Shanghai summit. Could this be Plaza2? The asset allocation implications are significant. We focus here on the potential volatility of G4 bond markets. If the links between Chinese capital outflows, surging G4 bonds and a strong US$ are true, then any reversal in flows will cause a further US dollar sell-off and crashing bond prices as investors flee these ‘safe’ assets.
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