We don’t think the sell-off in risky assets will continue

While we think that the stellar performance of many “risky assets” over the past year will not be replicated over the next few, we also doubt today’s generalised sell-off will continue.
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Franziska Palmas Markets Economist
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Although we think that there may be some further rotation away from “growth” stocks over the next few years, as Treasury yields rise, we doubt the S&P 500 will have an awful year.

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We think the sell-off in E-Z government bonds has further to run

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19 January 2022

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Earnings expectations and the outlook for DM equities

We think that there is more scope for earnings expectations to improve outside, than inside, the US. In both cases, though, we are not anticipating upward revisions on the scale seen over the past year.

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Assessing the risks to our positive view of E-Z peripheral bonds

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BoE policy may ultimately lead to a steeper UK yield curve

The yield of 10-year Gilts fell after the Bank of England kept its policy settings and forward guidance unchanged at its meeting today. However, we suspect that if the Bank continues to look through strong growth and activity data, investors may start to anticipate higher inflation further ahead in time, causing long-term Gilt yields to rise and the yield curve to steepen.

24 June 2021
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