We doubt the 10-year Bund yield will fall further

We are sticking to our forecast that the 10-year German government bond (Bund) yield will end this year at around -0.50%, even though it has recently fallen through this level following a renewed surge in COVID-19 cases in Europe.
Simona Gambarini Markets Economist
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Global Markets Focus

Is inflation about to spell trouble for the stock market?

US inflation hit its highest level since the 1990s in October and has now reached a rate that, historically, has coincided with very poor stock market returns. Notwithstanding the uncertainty around the impact of the “Omicron” variant of the coronavirus, we don’t expect inflation to stay at quite such high levels, so we aren’t among those calling for a stock market crash driven by high inflation, or a decade of negative real returns like we saw in the 1970s. But we do think investors are underestimating the chance that inflation remains high enough to put the brakes on the stock market’s gains, which we think will be underwhelming over the next few years.

1 December 2021

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Contagion from Turkey’s crisis likely to remain limited

Spillovers to other emerging markets from Turkey’s ongoing currency crisis have been limited so far and we think this will remain the case even if Turkey’s financial markets remain under pressure.

24 November 2021

DM Markets Chart Book

We think US inflation compensation will rise further

US 10-year inflation compensation has risen by another 20bp or so over the past month and we think it will increase further as inflation in the US proves more persistent than most expect. This is one of the reasons why we forecast the yields of long-dated US Treasuries to rise over the next two years.

19 November 2021

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Global Markets Update

We expect gradual increases in 10-year DM bond yields

We think most developed market (DM) central banks will look through temporary rises in inflation and leave rates unchanged until at least early 2023. Even so, we expect the yields of 10-year DM government bonds to rise in the next couple of years, although generally by more in the US than elsewhere.

3 June 2021

EM Markets Chart Book

We think EM equities will rise, not shine

We forecast that emerging market (EM) equities will make further gains between now and end-2022 as the global economy recovers further. However, they have lost a bit of ground to developed market (DM) equities recently and we doubt they will perform much better than them in the coming year and a half.

27 May 2021

Capital Daily

We think 10-year yields will rise gradually in most cases

While the RBNZ is gearing up to hiking rates next year, we think that most developed market (DM) central banks will look through temporary rises in inflation and leave rates unchanged until early 2023 at the earliest. This feeds into our forecast that the yields of 10-year DM government bonds will rise only gradually, in most cases, over the next couple of years.

26 May 2021
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