Commodities price reached its record low since 2000s

In line with deteriorated Chinese industrial activities, lowering Baltic Dry index, over-capacity for oil supply and strong US dollar particularly, commodities price has plunged to its lowest level since 2000s.

Nevertheless, global bond yields do not reflect this movement lowering upcoming inflationary pressure contrary to the case of last a few years. Rather, in U.S. and Germany, the yield spread especially 5s30s has widened further or stable despite increasing expectation for rate hike.

What do these signal?

Bond bears do not fear commodities price drop any more...?

If then, they convict real-term economic activities could accelerate with low price as a positive engine for consumption. In fact, this story is old fashioned. But, recent upward movement in U.S. wage growth signals change of economic environments. Moreover, some economists including New Keynsian and Neo-Fisherian expect positive change of economic dynamics as FED starts rate hike at least. At the same time, plunged commodities price may be not caused by likelihood of global deflation risk.

This is why bond market barely react on the terror in Paris today...
We should prepare additional surge in global bond yields...