Looking east

Forced selling and market turmoil in 2008 have created opportunities in global bonds for 2009

The past financial year has been a trying one for global investors, however, it has created several opportunities in interest rates, currencies and sovereign credit. Heightened concerns about inflation ensured volatile conditions in the first part of 2008. But as signs of economic downturn became ever more apparent, government bond yields in developed markets shifted downward. Indeed, towards the end of 2008, falling inflation, fears of deflation and the conviction that the developed world was facing a prolonged slump sent 10-year government bond yields in the US down to their lowest leve...