A recent article in Bloomberg reports that a “roaring” reflation trade in the first quarter has led to “lasting reverberations” across the globe.

Here are highlights of what the article cites as the quarter’s “most notable moves:”

• U.S. Treasuries have led a global selloff, recording their worst quarter since 1980.
• “The divergence between U.S. and European markets was borne out in the spread between benchmark Treasuries and bunds [German government debt securities], which widened more than 50 basis points.”
• Japanese yen and the Swiss franc—the “traditional havens of the currency world,” bore the brunt of selling amid the optimistic economic global outlook that the vaccine rollout has triggered, the article reports. “The moves were all the more notable given the outperformance of the dollar, which turned from a prime haven at the height of market turmoil in March 2020 into a bet on U.S. economic supremacy.”
• Holders of British bonds reportedly saw their worst quarter since 2000.
• Although developing nation “sovereigns and corporates issued a record amount of dollar-denominated debt on a first-quarter basis,” some weaknesses have recently developed on the issuance front. The article cites the examples of Indonesia, Russia, and South Africa—all of which shrank or cancelled bond offerings—which has led some strategists to conclude that “developing nations may be in for higher borrowing costs from here on.”