Outlook for Investment Markets
Global financial markets struggled in recent weeks with political risk (especially Ukraine) and with some weak economic outcomes (notably in the eurozone and Japan). As a result, investors headed back into government bonds and yields fell to exceptionally low levels, especially in Europe. Both bonds (in particular) and equities now look expensive given the prospect of ongoing political uncertainties and modest global economic growth. In New Zealand, the economy is still performing strongly, though the peak rate of economic growth probably is just behind us. The upcoming election remains a significant source of uncertainty.
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