Some curves are flattening whilst others are steepening 60 90 40 - PowerPoint PPT Presentation

Some curves are flattening whilst others are steepening 60 90 40 10s 30s spread 2s 5s spread 2s 10s spread 80 35 50 70 30 40 60 25 50 30 20 40 15 20 30 10 20 10 5 10 0 0 0 -10 Source: M&G, Bloomberg, 6 December 2018 B O N D V I G I L A N T E S

US economic forecasts: telling a different picture US ECONOMIC 2017 2018 2019 2020 FORECASTS (YoY %) Real GDP 2.2 2.9 2.6 1.9 Consumer Spending 2.5 2.7 2.7 2.1 Government Spending -0.1 1.7 2.3 1.2 Private Investment 4.8 5.6 4.2 3.1 Exports 3 4.3 2.7 2.8 Imports 4.6 4.6 3.9 3.2 Industrial Production 1.6 3.7 2.7 2.1 Source: Bloomberg, 7 December 2018 B O N D V I G I L A N T E S

Liquidity in favour of term risk as fear index picks up 3 Fear Index Fed Funds Rate US 3m Libor Overnight Index Swaps 2.5 2 1.5 1 0.5 0 Source: M&G, Bloomberg, 6 December 2018 B O N D V I G I L A N T E S

The fear index is on the rise once again as volatility increases 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 Source: M&G, Bloomberg, 6 December 2018 B O N D V I G I L A N T E S