Painful healing lies ahead — if we're lucky
Global markets have traded relatively nervously over the past month as investors have had to contend with a bottoming in inflation in several key developed markets
Global markets have traded relatively nervously over the past month as investors have had to contend with a bottoming in inflation in several key developed markets. Headline inflation rates, driven by base effects and a stabilisation in commodity prices, have begun to increase in the US, Europe and the UK. Although inflation in developed markets is expected to rise gradually, the upturn has already begun to contribute towards higher bond yields in these economies. Linked to the impact of rising inflation on bond yields in developed economies is the prospect of a reduction in monetary stimulus. In the US, eurozone and Japan, bond yields were also pressured higher by an increasing likelihood that the US Fed would raise rates next month and by rumours that the European Central Bank had recently discussed tapering the quantity of its monthly asset purchases. The rise in developed-market long-term interest rates was expected to cause a reduction in the search for yield, putting pressure ...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.