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The Roman alphabet has outlived its usefulness – at least as far as labelling the economic recovery is concerned. Having spent six months talking about ‘V’, ‘U’, ‘W’, ‘L’ and even ‘K’-shaped paths, for this edition we have decided to ditch the letters and go back to a simpler classification. The course of the disease remains the single most important determinant of the kind of economic recovery we get, but we now think a simple ‘good’ or ‘bad’ classification covers everything we need to discuss. We cover this reassessment and its impact on markets and investment conclusions in our new Vantage Point.
Start your week off right with our market snapshot from the Global Economics and Investment Analysis Group.
Major advanced economies yield curves (10-year yields – 2-year yields)
Probably not in a big way, but if it were to it would change the investment landscape completely.
Short term interest rates reached all-time lows in the US in May, rebounding only marginally since then. At face value, markets appear to be pricing in a significant probability of negative rates in the US. We see this scenario as unlikely.