Our Global Markets Chart Pack has been updated with the latest data and our analysis of recent developments.
Growth in most advanced economies will disappoint later this year, putting pressure on “risky” assets and favouring “safe” ones. Developed markets (DM) government bond yields will therefore decrease further, helped by central banks shifting towards easing monetary policy. Emerging markets (EM) sovereign bond yields – as well as DM and EM corporate bond yields – will broadly rise, as widening spreads outweigh the fall in “risk-free” rates. Equities will also fall back across the world, particularly in the US given how much optimism seems to be priced in. When the economic environment improves, however, “risky” assets will rebound, and DM government bond yields will fall further as central banks’ loosening cycles broaden – aided by declining inflation.
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