Bloomberg reported on April 18 that many Chinese customers have reduced their holdings of U.S. Treasury bonds and turned to European bonds due to President Trump's tariff measures. Lillian Tao, Director of Macro and Emerging Markets Business China Sales at Deutsche Bank, stated in an interview that "we have observed a decrease in the dollar component in Chinese investors' portfolios," while they are showing increasing interest in other markets, particularly Europe. She said that high-quality European bonds, Japanese government bonds, and gold may be potential alternative options for Chinese customers investing overseas. In recent weeks, assets denominated in dollars have been severely hit, and its status as a safe-haven asset has increasingly come under question. As the second-largest holder of U.S. Treasuries globally, China's actions have also become a focal point for investors. Tao said that some Chinese clients believe that the current yield on U.S. Treasury bonds is attractive after selling off. However, with U.S. policies becoming more unpredictable, Chinese clients are extremely cautious, as they cannot determine whether it is currently a good time to enter the market, or whether U.S. assets will continue to decline. Tao said that due to the unpredictable market volatility, an increasing number of Chinese clients are beginning to pay attention to German bonds, which were previously less focused on, and even turning to Spanish or Italian markets. Many financial giants are also preparing to gain more returns in Europe. Vanguard Group is optimistic about eurozone short-term bonds because the European Central Bank can freely cut interest rates. Citigroup's strategy analysts recently downgraded their rating of U.S. stocks to "neutral" while maintaining an optimistic view of Europe and raising their forecast for the euro-to-dollar exchange rate to 1.20. Additionally, on March 18 local time, Germany passed a fiscal expenditure plan worth nearly one trillion euros. On April 17, the European Central Bank announced a 25-basis-point cut in all three key interest rates in the eurozone. This is the seventh interest rate cut since June last year. Bloomberg believes that this indicates an improvement in the outlook for European markets. "Considering macro factors, Chinese investors are reconsidering reallocating funds to countries with greater investment potential," Tao said. This article is an exclusive contribution from Guancha Observer, unauthorized reproduction is prohibited. Source: https://www.toutiao.com/article/7494871982232666663/ Disclaimer: The views expressed in this article are solely those of the author. Feel free to express your opinion by clicking the "Like" or "Dislike" buttons below.