Salient to Investors:
Jim O’Neill said:
The US is returning to normality so expect 10-yr T-yields to rise toward 4 percent in the next couple of years as the 30-year bull market in bonds comes to an end. There will be quite ugly days.
The global economy is in the early stages of the recovery of the equity culture and perhaps the end of a 30-year growing love affair with bonds.
Speculation the Fed may taper may damp demand for emerging-market bonds as well as US debt.
When the game starts to change with central banks, it is inevitable bonds will suffer and we will see further reaction in many emerging markets, particularly where those with current account deficits, like Turkey.
India is the weakest BRIC and sometimes smothers decision-making.
Prefer Bangladesh assets over their Indonesian counterparts.
There remains value in assets from China and peripheral euro-area nations, and the safest bonds may become less fashionable.
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