A tale of two markets
The equity and bond markets appear split on the global growth outlook. The MSCI All Country World equity index has rallied 11% (GBP, total return terms) this year on the back of a global growth recovery and accommodative policy support1. In contrast, the US 10-year Treasury yield has trended down since the end of March. As a rule of thumb, lower government bond yields generally reflect weakening economic activity and vice versa. Clearly, both markets can’t be right on the economic outlook.
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