In Focus

In Focus: markets as we see them


Last updated: 21 October 2016

Inside this week:

  • Comeback season many talking heads have spent the past few years worrying what falling bond yields tell us about the prospects for the world economy. somewhat perversely, many of the same commentators seem similarly worried about the recent reversal of a small part of those yield declines
  • Base effect we have argued for some time now that government bond yields look inconsistent with the prevailing macroeconomic backdrop, and that market implied inflation expectations appear too low
  • Other reasons at the same time, there appear to be idiosyncratic factors behind these yield spikes regionally
  • What now fears of an equity market de-rating in response to higher bond yields seem overdone to us
  • Investment conclusion: even if yields do not rise much further from here, the real return prospects for government bonds are still poor in anything other than the worst case scenarios

Read the full In Focus [PDF, 512KB]

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This document has been prepared by the wealth and investment management division of Barclays Bank Plc ("Barclays"), for information purposes only. Barclays does not guarantee the accuracy or completeness of information which is contained in this document and which is stated to have been obtained from or is based upon trade and statistical services or other third party sources. Any data on past performance, modelling or back-testing contained herein is no indication as to future performance.

No representation is made as to the reasonableness of the assumptions made within or the accuracy or completeness of any modelling or back-testing. All opinions and estimates are given as of the date hereof and are subject to change. The value of any investment may fluctuate as a result of market changes. The information in this document is not intended to predict actual results and no assurances are given with respect thereto.

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