Source: Global Market Report On Monday, the turnover of US stocks ranked first, closing up 0.75% with a turnover of $38.014 billion. Since the opening on June 10, Nvidia's stock has been trading at adjusted prices after the split. The overall value of Nvidia is not expected to change after the split, and the lower stock price will make it easier for investors to reach. In terms of product structure, the operating income of 10-30 billion yuan products is respectively 401/1288/60 million yuan.

In recent years, there has been a strange phenomenon that has disrupted the traditional relationship between short-term and long-term bonds in the global bond market, which is now rapidly fading away and will have a widespread impact on the economy and over $40 trillion of government bond investments.

The so-called inverted yield curve - the anomaly of short-term yields exceeding long-term yields - has persisted in the United States for as long as two years, and this phenomenon is returning to normal in many parts of the world.

The trend of yield curve normalization or steepening first appeared in the United Kingdom bonds market in July and a month later in the USA bonds market. Now, this trend is also emerging in the Germany and Canada bonds markets.

This shift comes as global central banks begin to lower benchmark interest rates, after years of keeping rates high to contain inflation in the pandemic era. With price trends seemingly under control at present, policymakers are able to relax policies and shift their focus to ensuring that the economy does not fall into stagnation or recession.

As traders digest this new reality and bet on further interest rate cuts by central banks, short-term market rates plummet sharply. Due to the greater sensitivity of short-term bonds to changes in monetary policy, investors are eagerly betting that these bonds will benefit more than long-term bonds, leading to a decrease in their yields and a steepening of the yield curve.

"Steepening of the curve is a global phenomenon, possibly more pronounced in the United States," said Alberto Gallo, Chief Investment Officer and Co-Founder of Andromeda Capital Management.

While inverted and steepening trends may sound like bond market matters, their implications are worth noting as yield changes have long been a signal for investors' expectations of economic growth. Especially in the United States, an inverted yield curve is often a precursor to an economic recession. Some traders believe that the curve returning to normal reflects a view that an economic recession, or at least a significant deterioration in the economy, is an imminent risk, forcing the Federal Reserve to embark on a series of large interest rate cuts.

JPMorgan's Bruce Kasman and others pointed out that if the steepening of the yield curve is partly due to the rise in long-term yields, it indicates 'increased confidence in the Federal Reserve to achieve sustained economic expansion'.

Despite the slowing job market, the US economy has so far avoided a recession. This has also sparked a debate on whether the economy can avoid a downturn and achieve a 'soft landing' with the help of Fed rate cuts, with no definitive conclusion yet.

Meanwhile, the steepening of the European yield curve is due to slowing inflation and debates on whether high rates are damaging to the global economy. The Bank of England and the European Central Bank started their rate cut cycles ahead of the Fed, and US policymakers also initiated a more aggressive 50 basis point rate cut last week, highlighting concerns about slowing growth.

"The German yield curve has a strong relationship with the US, where the only trade is steepening of the curve," said Pooja Kumra, the European rate strategist at the Toronto-Dominion Bank. "Therefore, we are skeptical whether the steepening momentum will pause in the short term."

The task of UK and Eurozone policymakers is simply to control price increases, but the latest manufacturing data is hard to ignore, especially as Eurozone data indicates a loss of economic recovery momentum. Data released on Monday in the US showed that business activity expansion slowed slightly in early September, with deteriorating expectations.

The Fed's willingness to start the rate cut cycle with a 50 basis point cut has inspired investors from Blackrock, Pimco, and other asset management companies to continue betting on a further steepening of the yield curve. Strategists at Bank of America, BMO Capital Markets, and Morgan Stanley, among other Wall Street banks, also expect a similar trend.

The swap trends linked to the policy meeting dates indicate that traders are betting on the Fed maintaining a rapid pace of rate cuts, with expectations of a 75 basis point cut during the last two meetings of the year. This implies there will be at least one more 50 basis point cut this year, or an additional cut between the two meetings.

Editor / jayden