Witold Bahrke, senior strategist at Nordea Asset Management, discusses how sustainable the recent stockmarket rally is and what is in store for bonds.
It was a curious first quarter. Strong growth indicators resulted in an impressive rally in risk assets, betting on higher growth and inflation. At the same time, core government bonds also showed decent returns, implicitly questioning the sustainability of the rally. So, which will be right, equities or bonds? This is the key question for the rest of 2017. Three factors point towards bonds winning the argument. Firstly, risk assets are already pricing in a heroic rebound in global growth. Also, reflation is likely to peak and monetary conditions are tightening. Absent positive ...
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