UK - The eurozone and Japan could provide bond investors with some protection against falls in global prices, Standard Life Investment predicts.
Head of global bonds Rod Paris said improvements in equity markets could herald further increases in bond yields.But he emphasised that the outlook in Europe was far different from the US.
“In sharp contrast to America, the eurozone economy remains in a fragile state. Purchasing managers’ surveys across the eurozone have not enjoyed any post-war recovery, suggesting industrial production is unlikely to pick up strongly.”
Paris also said that with the authorities notoriously slow to react to weak economic conditions, Japanese government bonds could also provide some protection. But he cautions on the prospects for UK bonds.
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