28 Jul 2014
Global growth picks up, higher yields approaching – Goldman Sachs
FXStreet (Łódź) - The Goldman Sachs team of analysts stress the global growth has improved considerably since the last release of their GOAL report, increasing odds of bond yields rising soon.
Key quotes
“Most of the acceleration we had expected is now behind us, but we expect growth to be sustained at current or slightly higher levels, with the US growing at around 3% through 2017.”
“We think the likelihood of a rise in government bond yields has increased and see this as a key aspect of the near-term macro outlook.”
“To prepare, we downgrade corporate credit to underweight over both 3 and 12 months and downgrade equities to neutral over 3 months.”
“We expect dispersion within commodities due to different supply situations together with backwardation to drive returns and see opportunities in nickel, zinc palladium and aluminum.”
“We downgrade corporate credit to underweight over both 3 and 12 months. We think spreads will narrow slightly, but given already tight levels, rising government bond yields are likely to dominate the returns, especially for US IG credit where spreads are the lowest.”
“We stay underweight on government bonds. We expect yields to rise due to sustained high US growth and accelerating inflation, a decline of deflation concerns in Europe and an improving inflation outlook in Japan.”
“We seek to benefit from sustained growth at current higher levels and the return of cash to shareholders.”
Key quotes
“Most of the acceleration we had expected is now behind us, but we expect growth to be sustained at current or slightly higher levels, with the US growing at around 3% through 2017.”
“We think the likelihood of a rise in government bond yields has increased and see this as a key aspect of the near-term macro outlook.”
“To prepare, we downgrade corporate credit to underweight over both 3 and 12 months and downgrade equities to neutral over 3 months.”
“We expect dispersion within commodities due to different supply situations together with backwardation to drive returns and see opportunities in nickel, zinc palladium and aluminum.”
“We downgrade corporate credit to underweight over both 3 and 12 months. We think spreads will narrow slightly, but given already tight levels, rising government bond yields are likely to dominate the returns, especially for US IG credit where spreads are the lowest.”
“We stay underweight on government bonds. We expect yields to rise due to sustained high US growth and accelerating inflation, a decline of deflation concerns in Europe and an improving inflation outlook in Japan.”
“We seek to benefit from sustained growth at current higher levels and the return of cash to shareholders.”