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While inflation rates in the U.S. and Europe are approaching the targets of the respective central banks and thus increasing the scope for interest rate cuts, recent political developments have also influenced bond market prices.

 

The result is differing scenarios for the individual sub-markets that investors should consider when making their investments. Regional differences also need to be taken into account when weighing up opportunities and risks.

 

In this CIO Viewpoint Fixed Income – we discuss which course central banks are likely to pursue in the current inflation environment and which potential entry opportunities investors should look out for in the bond market.

 

Key takeaways:

  • Recent economic data from the U.S. and the Eurozone have created the necessary conditions for interest rate cuts. However, interest rates are likely to remain at a high level.
  • Not only the elections in Europe, including France in particular, but also the U.S. election campaign, which is gaining momentum, have led to significant price movements on the bond markets.
  • Despite recent price fluctuations, bonds offer interesting yield prospects. Good entry opportunities could arise in the coming months.

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The CIO Viewpoint below is available to download. Please refer to the Important Information at the end of the memo for disclosures and risk warnings.

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