Mike Riddell: Are global government bonds running out of juice?

Time to become less bullish, says manager

clock • 7 min read

The most common question that bond fund managers have been asked since 2008 is when central banks will raise interest rates, says Mike Riddell, fixed income portfolio manager at Allianz Global Investors.

The second most common question is usually how much they will hike by when they do. It is now looking more likely that the next move in UK interest rates will be down rather than up, with a greater than half chance of a rate cut happening this year. The market is not pricing in a UK rate hike until summer 2020. But, ultimately, what the Bank of England does to interest rates over the short to medium term makes very little difference to how the gilt market performs, at least any gilts other than short-dated ones. So what is the main driver of gilt market returns if it is not the ban...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Economics / Markets

UK ups defence spending to 2.6% of GDP by 2027 as billions pledged

UK ups defence spending to 2.6% of GDP by 2027 as billions pledged

Chancellor delivered Spending Review

Sorin Dojan
clock 11 June 2025 • 4 min read
Chancellor to pledge billions to 'invest in Britain's renewal' in Spending Review

Chancellor to pledge billions to 'invest in Britain's renewal' in Spending Review

Rachel Reeves to unveil Spending Review later today

Linus Uhlig
clock 11 June 2025 • 1 min read
Five years on from Covid: What's next for markets?

Five years on from Covid: What's next for markets?

It is now five years since the start of the UK’s Covid lockdown. Since then, we have seen considerable market and geopolitical-related change. Here, William Marshall looks back over the past five years and also explores what we might expect from markets...

William Marshall
clock 06 May 2025 • 4 min read