Fundamentals still support bonds

We remain positive on bonds globally, feeling they are supported both by economic fundamentals and, in the UK at least, by some strong technical factors. Globally, it is clear that growth will be lower this year than last, although the extent to which the US will slow is unclear. The 100bp of interest rate cuts we have seen since January certainly suggests the slowdown is severe, although the consensus is for a sharp rebound in activity in the second half of the year. This scenario would be positive for US bonds, both government and corporate. A swift recovery should not endanger company ...