Markets: Reversal in lower bond yields – Rabobank
In view of analysts at Rabobank, a reversal in lower bond yields seems to be a reflection of market positioning and belief the risks of US-China trade war and a Hard Brexit are over
Key Quotes
“It also backs a firm belief a rate-cutting cycle central banks saw no need for 12 months ago is sufficient to ensure there is no risk of a global economic downturn ahead.”
‘But we beg to differ, as economic indicators do not point to a global recovery ahead despite the recent better-than-expected data in Europe and the US.”
“Consequently, the global economic and bond market recovery will need to come from China – just as has been the case several times since the Global Financial Crisis.”
“But lower Chinese economic growth and, despite its rhetoric to the contrary, a China importing less and less, are a double negative for overall global growth.”
“Together with a potential shift in global policy responses, this likely means a new shift lower in bond yields again soon.”
Author
Sandeep Kanihama
FXStreet Contributor
Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.
