Lehman Brothers still positive on bonds

There is still value to be found in bonds in the US and Japan but less so in the eurozone, according ...

There is still value to be found in bonds in the US and Japan but less so in the eurozone, according to John Lovito, head of global fixed income for Lehman Brothers Asset Management. He thinks the US market is pricing in sub-prime defaults that are more extreme than will actually be seen over the next 12 months. Lovito said the Japanese economy is a better story now than it was a few years ago when there was a severe deflationary scenario driven by interest rates. He expects the Bank of Japan to normalise rates up to 1% or so. From a macro point of view, Lovito is neutral on the eurozo...