Growth Reference Changed To Normal

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    With continued and more assured growth in the United States and the beginning of a (shallow) recovery in Europe, the ‘Triasima Economic and Market Commentary’ has changed its December 2013 ‘weak worldwide growth’ reference scenario to ‘normal worldwide growth.’ The new reference scenario implies rising profits for corporations and a generally positive background for equity markets. With inflation remaining absent from the North American economies and excess capacity the norm, especially in the labour market, the outlook is positive for bond returns. However, the economic cycle is slowly maturing and the flow of economic news to come will provide interest rates with more reasons to go up rather than down over the next several quarters. Still, in view of the low prevailing rates, the bond market can hardly be expected to provide more than marginally positive returns, it says. Longer term, investors can continue to expect poor, albeit positive, returns from the bond asset class.