Navigating the volatility in global bond markets

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• 00:00

  Bond yields around the world have been exceptionally volatile in recent weeks.

• 00:04

  So what's behind the sharp moves in global bonds and what could they mean for the economy and for investors?

• 00:10

  I'm Allison Nathan and this is Goldman Sachs Exchanges.

• 00:13

  Today I'm joined by Johnny Fine,

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  Global Head of Investment Grade in Goldman Sachs Global Banking and Markets and by George Cole,

• 00:19

  Head of European Rates Strategy for Goldman Sachs Research.

• 00:23

  Johnny is here in our New York studio and George is joining us from our London office.

• 00:27

  George, Johnny, good to talk to you.

• 00:28

  Nice to be back.

• 00:29

  Thanks Allison.

• 00:30

  So George, let's start with you.

• 00:32

  Global bonds have been markedly and I would say unexpectedly no investor that I know of was expecting this level of volatility heading into the new year.

• 00:41

  So help us understand what's driven the recent moves.

• 00:44

  Yeah, thanks Allison.

• 00:45

  So if we go back over a kind of multi-month period

• 00:48

  since say around about the September period have been very substantial moves in global bond markets.

• 00:53

  US yields moving about 100 basis points higher at the 10-year point on the curve, a similar move in the UK,

• 01:00

  maybe about half that in European yields and all of that is really I think due to a revision of expectations on growth,

• 01:10

  on inflation and on the monetary policy path that is expected particularly from the Fed.

• 01:16

  Now part of that is because the US dataset has been better.

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