Two words which cannot be used to describe the global recovery at present are 'strong' and 'synchronised'

Two words which cannot be used to describe the global recovery at present are 'strong' and 'synchronised'. Indeed with faltering recoveries in Europe and Japan and softening growth in China, it appears that it will take the global economy several years to return to trend growth. However, counter-intuitively this may be constructive for global risk markets, as the imbalances which typically end a cycle are likely to take much longer to build-up. However, it also means that in the absence of a strong recovery, that the much discussed cataclysm in the bond market is also unlikely as not even the US economy could cope with a 10-year rate at 3.5%. As such, I believe that the current cycle is likely to be a very long one and investors may need to factor this into their portfolio thinking. Our full overnight report is here: (VIEW LINK)