Within AMP Capital’s global fixed interest process we try to identify inflexion points that support our valuations and investment hypotheses, so that we can position ahead of the market. While we have had a relatively pessimistic bias through the second half of 2015, we are starting to see some interesting shifts in our indicators and analysis that are worthwhile highlighting.
With an important week of data coming up, AMP Capital’s Macro Global Fixed Income team highlights some key developments.
In theory, to see a sustainable push higher in risk assets, and see the Fed deliver the rate increases that they have forecast themselves to do, we need to see a synchronised growth uplift across regions. In this environment the policy divergence/strong USD regime can be offset with growth synchronisation/stronger high growth currency regime. And with the USD stable or only slowly appreciating on a broad-based basis, under this scenario, US yields can reprice to higher levels, without the feedback of a stronger US dollar (USD) into tighter global financial conditions. This, in turn, should be supportive for risk assets.
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