November 8, 2019 | By Hank Cunningham
Recession talk has been pushed to the background as it appears a mid-cycle recovery is underway and bond yields globally have bottomed. This view is contingent on further progress in the U.S.-China trade discussions.
Importantly, Euro Sovereign yields began to move higher at a faster pace than North American yields. This is partly due to the emphasis on fiscal stimulus espoused by the incoming ECB President, Christine Lagarde. Not only would fiscal stimulus offer help to economic recovery, but it would also increase the supply of bonds in the market place. We believe this uptrend in yields will continue, pushing the U.S. Ten-Year through the 2% level before year-end.