Global Market Perspective - Economic and asset allocation views Q2 2021

Investors welcomed 2021 with a more positive outlook on the world economy. The roll-out of the Covid-19 vaccine and substantial policy support continued to aid the rally in risk assets. Commodities shone brightly, lifted by hopes of a return to economic normality. Meanwhile, the more cyclical and value-orientated stock markets of Europe and Japan outperformed. Equity returns in emerging markets were more modest, given the stronger US dollar on the back of significant US fiscal stimulus. This also helped drive government bond yields higher, which led to a sell-off in developed sovereign and US credit bonds.