The August lull in markets cannot mask the deeper problems in Europe and headwinds in the US, according to Old Mutual Global Strategic Bond fund manager Stewart Cowley.
Contemporary bond markets are driven by irrationality and manipulation and there is little reason to think this situation will change soon. Global economic recovery is slowing and indicators for business confidence have plunged. Despite the August lull, there is still a long way to go in resolving the sovereign debt crisis in the eurozone. We expect the European Stability Mechanism to come into being more or less on time towards the end of this year, and to put forward promised funding for the Spanish banks. But should this happen, and should Greece receive the additional help it so e...
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