Wage activity has picked up significantly in the United States, and consumers are in a much better position to spend than in prior tightening cycles. This is the first of the good points we discuss with Eric Souders and Nigel Jenkins from Paydel & Rygel Investment Management in terms of the outlook for the bond market. Household cash is in very good shape -but inflationary pressures increase alongside wage pressures. In the last of the ‘good’, the shape of the yield curve does not signal towards a recession in the US just yet. In terms of the bad, markets face decelerating growth, accelerating inflation and icreased central bank activity – however the team at Payel expects inflation to subside, with some early indicators suggesting it may have already peaked. On to the ugly – with both stocks and bonds performing less than admirabily in the first quarter and correlations turning sharply positive. We also touch on Russia’s invasion of Ukraine affecting supply chains.

Watch Eric Souders and Nigel Jenkins on ausbiz

Next Video