World equity markets, after recovering from February through to late April, have softened again more recently in another episode of uncertainty over global growth prospects, especially in the eurozone and Japan. While the global economic outlook remains modestly positive, it carries several downside risks, and recurrent outbreaks of anxiety may well feature during the rest of this year. Global bond yields have dropped to even lower levels again, and now look more likely to stay at these ultra-low levels for some time. Local equities have been outperforming global equities, as the latest data on the prospects for the New Zealand economy have been positive. The Reserve Bank of New Zealand, or RBNZ, looks likely to cut interest rates again, possibly as early as next month.
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