Across the world, the so-called breakeven inflation rate (the inflation rate at which inflation-indexed government bonds and ordinary bonds will pay the same total return) has decoupled from commodity prices.

As the chart above makes clear, breakeven inflation in the US, Germany and Japan tracked the S&P/Goldman Sachs Commodity Index closely until the end of 2018. Germany and Japan decoupled first, then the US.

Read more: New kind of deflation impels the great bond rally

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