Telecom auction may hurt supply of eurozone debt

Royal & SunAlliance Investments is favouring short and long-dated government bonds in the eurozone in the belief yields are set to fall. The group is forecasting that benchmark eurozone 10-year yields will fall from 5.29% to 5.2% in 12 months time and that interest rates in the eurozone will remain at 4.25%. Royal & SunAlliance Investments believes bond markets are being too pessimistic about the inflation outlook in the eurozone and yields will start to fall once the markets realise inflation is set to remain low. Dave Hooker, investment manager, fixed interest at Royal & SunAlliance Inv...