Government borrowing is large but not yet a problem

Advanced country governments have found it easy to increase their borrowings at very low interest rates, but they can’t make a habit of borrowing such large sums. Over the last three months, most governments have greatly increased their spending and suffered a major decline in tax revenues. There was always going to be a large … Continue reading “Government borrowing is large but not yet a problem”

Looking back at the markets through June

A selection of articles looking back through the markets last month. Brexit: no further forward   Global market review The third anniversary of the Brexit referendum came and went in June, and still the issue of Brexit remained up in the air. As the clock ticked towards the extended deadline of 31 October, the Conservative … Continue reading “Looking back at the markets through June”

Investors dump equity in favour of safe havens

Government bonds received a boost in demand last month as investors’ risk appetite was tested by volatility in equity markets. This risk-off attitude proved negative for corporate bonds, however. The looming threat of a trade war between the US and China sent shockwaves throughout equity markets last month, as investors braced for the impact of … Continue reading “Investors dump equity in favour of safe havens”

UK bond market review – July 2016

Expectations of monetary easing, combined with strong demand for safe-haven investments, drove down UK bond yields during July. However, investors were surprised – and, in some cases, disappointed – by the Bank of England (BoE) policymakers’ unexpected decision to leave UK interest rates unchanged at 0.5% at their July meeting. A cut in rates, accompanied … Continue reading “UK bond market review – July 2016”