The latest phase in the trade conflict between the US and China, involving higher tariffs on further Chinese exports and (by way of retaliation) a devaluation of the Chinese currency by multiple percentage points, has led to an equity correction, above all in emerging markets, and to a further inversion of yield curves. It is possible the markets have now moved into a phase of exaggeration, as evidenced by extreme capital flows into government bonds, gold and the Japanese yen.

The financial markets often turn more volatile in the late summer or early autumn. In addition to increasingly frequent “Trump tweets” – the US electoral campaign has quite clearly begun – the inversion of the US yield curve has fuelled increasingly heated debates in the markets and media. Below we look at the key reasons why the inversion of the yield curve is significant in the current as well as the historical context – but also why a comparison with previous yield curve inversions is difficult. 

The turbulent performance of Bitcoin over the last year has brought this cryptocurrency to the attention of the wider public. But this currency has actually been around for almost ten years, and an estimated 1,600 other alternative currencies have also sprung up in the meantime. The question is often asked whether these constructs – which only exist in the form of digital code – can really be considered currencies at all in a way that bears comparison with the dollar, euro or yen. We will return to this question later in this article. First of all it is worth establishing what actually lies behind cryptocurrencies such as Bitcoin, Ether and Ripple.