A re-acceleration in US growth may be the catalyst for a broad drop in financial markets

Bonds look especially vulnerable to any upside surprise in inflation and/or re-acceleration of US growth which mean rates go up faster than currently expected. Given historically low yields, tight spreads and still extreme leverage, the risk/reward for bonds looks unattractive, and perhaps now reflects a degree of complacency and over-confidence in central banks. Of course US equities would not be immune from any correction in bond markets, especially in light of their vulnerability to a rising US dollar, and we see better relative value in Europe and Asia as this plays out. That said U.S. equities can ultimately continue to rise over the medium term as improved economic fundamentals drive corporate revenues and underpin valuations. (VIEW LINK)

Livewire News brings you a wide range of financial insights with a focus on Global Macro, Fixed Income, Currencies and Commodities.


No areas of expertise

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.

trending on livewire
Get the best of Livewire by signing up to our popular daily newsletter