Sluggish growth hits government yields

Sluggish economic growth and the threat of deflation drove global government bond yields to record-low levels in mid-June. Since then, however, yields have soared, as better-than-expected economic news and reasonably positive quarterly earnings reports have encouraged investors to shift their attention to equities. And they are likely to rise further because of the monetary and fiscal measures in the US. What does that mean for the corporate bond sector? Essentially, there are two key risks associated with corporate bonds: default risk and duration risk. Default risk is the probabi...