US

Tapering panic has driven a major sell-off in government bond markets over the last month, but bond investors suggest there is scope for yields to go even higher from here.

HIGH YIELD BONDS

Markets across the continent were lower in morning trading as investors reacted to heavy selling in emerging markets.

US consumer inflation increased in July, hitting the Federal Reserve's 2% target rate and keeping it on track to taper bond purchases as early as next month.

Shares in the US closed sharply lower overnight, with some indices hit by the worst one-day percentage falls since late June, as positive jobs data sparked fears of an earlier move to taper QE than expected.

Shares of technology firm Apple soared yesterday after billionaire investor Carl Icahn revealed he had taken a large stake in the company, and is pushing for higher payouts to shareholders.

Investors who held their nerve and bought in to equity markets at the bottom in 2008 have made significant returns since then as markets recovered from the financial crisis.

Ben Bernanke has successfully calmed markets' June nerves but is now concerned with how quickly risk appetite has returned, according to Ruffer investment directors Hamish Baillie and Steve Russell.

Fixed income managers have taken advantage of pricing opportunities in the high yield space to move back into the asset class, after outflows hit record levels in June following the Federal Reserve's tapering talk.

Terry Ewing, manager of the Ignis American Growth fund, is moving in to consumer discretionary stocks in anticipation of improvements in the domestic US economy.