The implications of a flattening yield curve

Despite market volatility, the synchronised global economic recovery has continued apace. In the UK, GDP forecasts were revised up to 1.6% on the back of this stronger growth, whilst we also saw wage growth exceed inflation for the first time in twelve months. However, this dip in inflation (to 2.5%) has caused the market to speculate that UK interest rates – and therefore bond yields – will not now rise as fast as previously thought.

Michael Count

Michael Count

Senior Fund Manager, Fixed Income

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Why growth could be revised up in the US

The first estimate of Q1 US GDP growth came in at 2.3% on Friday afternoon, slightly ahead of consensus expectations but much lower than the 2.9% seen in the previous quarter. Some may see this as a disappointment and a further sign that the global economic recovery is slowing. However, we believe Q1 GDP numbers have structural flaws, which means that the US Federal Reserve (Fed) is unlikely to reverse their plans for the trajectory of interest rates.

David Arnaud

David Arnaud

Senior Fund Manager, Fixed Income

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Q2 2018 outlook: a mature economic cycle

As volatility has returned to financial markets, driven by less accommodative central bank policy and fears over the path of inflation, an overarching question is when is the current cycle likely to end?

David Marchant

David Marchant

Chief Investment Officer, Canada Life Limited & Managing Director, Canada Life Asset Management Limited.

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Why active management will be crucial in protecting capital

The likely challenge over the next few years is likely to be to preserve, rather than seek higher returns on capital. This is particularly important given that global central banks are currently withdrawing monetary easing. We believe that active management will be crucial in this kind of market environment, particularly in the short-dated corporate credit space.

Michael Count

Michael Count

Senior Fund Manager, Fixed Income

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The case for global bonds amidst rising interest rates

In February, a surge in inflation expectations in the context of strong global growth, combined with central banks hinting at upcoming additional rate rises caused a spike in government bond yields globally. As a result, fixed income assets have been volatile, but have held up far better than equities. Why?

David Arnaud

David Arnaud

Senior Fund Manager, Fixed Income

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