In September, as the US president announced the continuation of the trade war with China with additional 10 percent restrictions on Chinese imports , the dollar suffered a loss on the foreign exchange markets. China reduced its holdings of U.S. Treasuries in July as the trade war began and Chinese ownership of U.S. bonds, notes and bills was reduced by $1.17 trillion, while the Japan, France, Singapore, Taiwan and Saudi Arabia increased their holdings. Japan's assets increased to $1.04 trillion. Lately, Japanese investors have sold more than $60 billion worth of U.S. bonds and bought European bonds, reflecting quantitative easing in the eurozone. The U.S. bond market now expects at least two rate hikes this year, as strategists say the factors shaping the economy and moves by European central banks to end bond purchases assets raise doubts about a rate hike. The U.S. 10-year yield is carefully scrutinized by investors because it is linked to loans, businesses, markets and even mortgages, and yield growth is inversely related to price. In Europe, Italian government bonds fell on optimism that the new coalition budget would be based on EU rules on fiscal discipline. Yields on two- and five-year bonds fell 15 basis points to their lowest month since July, while German debt hit its highest level in four months. Even high-yield European bonds became very cheap in September due to high political risks in Italy. With the influx of funds, the historic record of underperformance of European bonds relative to those of the United States could be reversed, making high-yield European bonds more attractive. Experts believe that the bond market could undergo a revaluation. Say no to plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”? Get the original essay Investors believe the Fed will raise rates without creating any impact on the economy. The head of US rates strategy believes that bonds have been ultra-accommodative and poorly valued in recent years. The 10-year yield was above 3 percent during April, May, June and August, but it could not hold for long. Currently, the 10-year Treasury yields 3 percent at the motor and 2.8 percent at the 2-year, and the federal funds rate is expected to rise to between 1.75 and 2 percent. The U.S. jobs report showed an average increase in hourly wages that boosted Treasuries, but the sales report had a negative impact as it was below expectations, although revised data on Retail sales were subsequently released, which showed an increase in July sales of 0.7 percent. percent, an expected increase of 0.5 percent. Emerging market central banks purchased U.S. government bonds and demand for government bonds declined due to increased selling by emerging markets. Reduced liquidity in the global bond market could harm markets in general. Central banks in several countries are reducing their reserves and countries like Turkey and Argentina are selling government bonds..