We think the sell-off in DM bonds will resume

While the yields of long-dated government bonds in the euro-zone, UK and US have dropped back a bit in recent days, we think they will rise between now and the end of 2023. We expect increases in yields to be particularly large in the US given our view that high inflation there will prove persistent.
Franziska Palmas Markets Economist
Continue reading

More from Global Markets

Global Markets Update

China’s economic slowdown and US Treasury yields

Although slowing growth in China has probably weighed on US Treasury yields in the past, we don’t expect it to prevent them from rising over the next couple of years.

21 October 2021

EM Valuations Monitor

Lower valuations may not help EM equities outperform

We don’t think the low valuations of emerging market (EM) equity indices relative to those of developed markets (DMs) is reason to expect EM equities to outperform over the next couple of years.

18 October 2021

DM Valuations Monitor

Assessing the outlook for US equity valuations

We forecast that the valuation of the US stock market will deflate a bit further over the next couple of years, though we are not expecting a sharp decline.

8 October 2021

More from Franziska Palmas

Capital Daily

Chinese equities may underperform even if Evergrande fears fade

Even if concerns about potential spill-overs to China’s financial system from troubles at Evergrande fade, we still expect Chinese equities to underperform equities elsewhere over the next two years.

4 October 2021

Global Markets Update

A deeper dive into Chinese equities’ sectoral performance

While financials and real estate have been among the worst-performing sectors in the MSCI China Index this year we think that there may be scope for them, as well as the energy sector, to outperform the materials and health care sectors and “technology” sectors over the next two years. This is because the dismal prospects for earnings in financials, real estate and energy already appear to be reflected in current market prices, whereas expectations for earnings in other sectors still seem too upbeat to us.

29 September 2021

Capital Daily

The German election & the outlook for E-Z bonds & the euro

We think that regardless of which coalition ends up governing Germany in the aftermath of the general election, there won’t be a big shift in fiscal policy or Germany’s attitude towards European integration. Accordingly, we remain comfortable with our view that government bond yields in the euro-zone will rise more slowly than in the US and weigh on the euro/dollar exchange rate between now and the end of 2022.

27 September 2021
↑ Back to top