Turbulence in global bonds and a steady beat in US earnings
If you’re tracking equities, it’s vital to keep an eye on the bond markets, as they’re signalling genuine unease. That nervousness is now rippling through global economies.
Just look at the past couple of weeks: Japan’s Prime Minister Shigeru Ishiba stepped down after his party’s weak election showing, and France’s François Bayrou was ousted in a no-confidence vote. Both leaders were trying to hold the line on fiscal discipline, and their demise signals to the bond vigilantes – those eagle-eyed investors who punish loose spending – it’s time to be concerned.
Unsurprisingly, yields on long-term Japanese government bonds hit levels unseen since 1999, and French debt is under even heavier pressure from a massive savings plan that’s raising borrowing costs.
This isn’t isolated. We’re also seeing broader disarray…
