Bond market outlook remains mixed

While poor macroeconomic news and disappointing corporate earnings figures have undermined equity markets, the same newsflow has contributed to rising government bond markets. Monetary policy in the US, Japan and UK has been accommodating, with a bias in the US and UK towards further easing and the imminent prospect of further cuts in interest rates. Growth prospects in both the eurozone and Asia have also deteriorated. Recent data releases in Germany, France and Italy have given unequivocal evidence of a rapid slowdown in the eurozone. Profit warnings are almost a daily event and ...