Companies around the world are borrowing in Chinese yuan instead of dollars, which is bad news for the dollar, US bond markets, and American borrowers.

• Borrowing in dollars now costs far more than borrowing in China — US long-term rates are above 5% while China's are below 2%.
• Foreign companies raised more than double last year's amount in Chinese bond markets, and now make up half of that market; even a big Dutch bank joined in.
• US borrowing costs keep climbing because the Treasury has to sell huge amounts of long-term debt to cover a funding gap of well over a trillion dollars.
• Weak US companies are paying 16% or more to borrow, which points to layoffs, hiring freezes, and defaults ahead.
• Trump has said he will hold off on striking Iran until after the midterms, mostly because oil near $105 and high inflation leave no room for another shock.

Outlook: Expect the shift to yuan borrowing to keep accelerating, US yields to push higher, and renewed Middle East escalation once the midterms pass.