Oscar Wilde supposedly once said that ‘everything popular is wrong’. Well, the overwhelming consensus at the start of 2014 that bond markets were not a great place to be invested turned out to be very wrong indeed. The relentless march lower in bond yields, and thus strong performance from government bonds and investment grade (for example, sterling IG has returned more than 10% so far this year), was one of the big surprises of 2014. Yields have fallen against a backdrop of decent growth and the end of QE in the US. However, the macro picture elsewhere looks less rosy, and while the US prepares for higher interest rates, the ECB is on a different path.
So what awaits us in 2015? How real is the threat of deflation in Europe? Will the dollar bull market continue? What’s in store for emerging markets and what impact will the sharp fall in oil prices have on global growth next year? Jim will tackle these questions and more in our latest Panoramic outlook.