Growing bond market risks may require more caution, focusing on local emerging market debt, floating rate loans, and strong corporates. Read more...
Central bank and government actions will come under increasing scrutiny as investors look for further signs that accommodative monetary policy is ending.
Any signals that the Federal Reserve and People’s Bank of China may tighten further, or that the European Central Bank will begin tightening, will likely cause yields to spike and volatility to increase.
Political risk also remains a concern in the U.S., Europe, and certain emerging markets.
In this environment, investors may find it prudent to focus on areas such as local emerging market debt, floating rate bank loans, and strong developed world corporate debt.