EP Monthly - Sep 2021

Since the beginning of April, US and Eurozone sovereign fixed income markets have been tremendously bullish, to the extent that some analysts bitterly claim there might be a disconnection between the current macroeconomic environment and the nominal yields. With the perspective of global GDP growth for 2021-end around 6%, US and Eurozone inflation above 5% and 3%, respectively, it seems hard to explain the rally in bond prices experienced last July. Profitability to yield fell off to levels not seen since February last year, although the macro and pandemic environments are substantially different. The US T-Note yield is down 50 bps from last March’s highs, standing at 1.3% (-1.1% in real terms) with the German Bund yielding -0.46% (-16 bps since July) and peripheral risk premiums remaining relatively stable at 0.6% in Spain and 1% in Italy.....

Global Market View - Sep 2021

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