Yield opportunity in the bond market: October 2020

Yield opportunity in the bond market: October 2020
Yield opportunity in the bond market: October 2020
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Most economic indicators for August and September point to a slowdown in economic growth. However, growth rates still remain relatively strong. Even in Japan, which has lagged behind the trend so far, published improvements in economic indicators as well. Korea and Taiwan, interesting as a leading indicator, shows strong export dynamics. In Europe, infection rates have risen. This affects the service sector and the labor market in particular. A quick recovery is currently impossible.

The US presidential election is increasingly coming into the focus of market participants. Should the Democratic candidate win, the chances of an additional fiscal package are very high due to the majority of Democrats in the House of Congress. Market participants are currently focusing on the fundamentally positive aspects such as an ultra-expansive monetary policy, unchanged fiscal policy (no consolidation expected) and the prospect of a vaccine in the first half of 2021.

Development of bond yields of US- and EUR-Government-Bonds and EUR-Corporate-Bonds
Investment-Grade (10/2015-10/2020)

 

Development of bond yields of European High-Yield-Bonds compared with global High-Yield-Bonds and Emerging-Markets-Corporate-Bonds (10/2015-10/2020)

 

Please note:
The development of historic yields is not a reliable indicator for future developments of a specific asset category or asset class. The charts above do not include any fees or costs.

Ratio-Overview (more information and all risk notes can be found at www.erste-am.com)

 

Legal note:
Prognoses are no reliable indicator for future performance.

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