Bond bulls should not rest easy. The world may have reconciled itself to the financial insanity of negative yields, as central banks continue to cut interest rates. But there are signs that the big rally in bond prices may be reaching a turning point. The reason? A major, long-term rebalancing in capital flows between the US and China.

Instead of excess global capital flowing into overinflated US dollar markets, money is moving into underinvested renminbi assets. China is turning from being one of the largest providers of global capital and a “double surplus” economy — having both a trade surplus and a financial one within its balance of payments — to a consumer of capital. This is a result of its fiscal deficit rising and current account surplus shrinking.

This trend could either significantly tighten global monetary conditions or, more unexpectedly, lead to the imposition of global capital controls. Both scenarios would shake bond markets out of their current complacency.