Global growth remains desynchronized, with the Eurozone, Japan and the UK showing an ongoing moderation in growth, whilst the US remains robust.
In July, US Treasury (UST) yields rose. US-China trade tensions continued to persist. The risk of a trade war between the US and Europe tempered after the two countries announced they will cut trade barriers.
The Australian bond market (as measured by the Bloomberg AusBond Composite 0+ Yr Index) was up 0.16% over the month. The yield curve flattened as the spread between long-term and short-term bond yields narrowed. 3-year government bond yields ended the month up 3 basis points (bps) while 10-year government bond yields also rose, up 2 bps to 2.65%.
In March 2018, Bloomberg announced a conditional decision to include Chinese bonds in its flagship bond index: Bloomberg Barclays Global Aggregate, starting from April 2019.
In June, the US Treasury (UST) curve flattened. The US Federal Reserve (Fed)'s 25 basis points (bps) rate hike was accompanied by a more hawkish tone, supporting higher short-term rates.
Global growth is becoming increasingly less synchronized, with the Eurozone, Japan and UK showing an ongoing moderation in growth, whilst the US remains robust.
Our London-based Emerging Market fixed income portfolio manager provides an update for Latin American markets in the midst of a hectic election schedule. Despite the risks, pro-market reforms should still progress to varying degrees across the region.
In May, US Treasury (UST) yields ended lower. A solid US jobs report supported the bearish bias in UST yields that prevailed.
The ECB recently celebrated its 20-year anniversary and instead of a birthday cake, DB research released a compelling chart about how different asset classes have performed over this time period.
Despite uninspiring global equity performance in the last three months, at least for USD-based investors, Nikko AM’s Global Investment Committee continues to be positive on global equities on a one-year view, particularly those in Japan, Europe and the Asia Pacific, but remain unenthusiastic on global bonds.