European Central Bank

When the relationship between two well-observed and liquid variables in the bond markets reaches multi-year wides, it warrants attention.

Rising inflation a risk

Political concerns remain

Markets have benefitted from a co-ordinated global recovery, led by central banks operating in a synchronised manner.

Could result in significant amount of disruption for markets

Headwind from euro strength should abate

Euro a headwind

Kept rates unchanged

Since the end of 2007, European equities have underperformed US equities by 63% on a real total return basis (in local currency terms).

US 70% responsible for current rates