No sign of sustainable Asia recovery

Despite historically low global inflation and increasing prospects for global economic growth, the signals from the traditional equity and bond valuation tools remain exceptionally unclear. In spite of the recent setbacks global equity markets, most notably the US, are trading well above their fundamental fair value levels. Although corporate earnings expectations have improved, the decline in global bond markets has eroded an important prop for equity market valuations. While a severe expansion in credit risk premium has occurred in the bond markets, equity risk premium remains historical...