Financial markets – rotation into riskier assets

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Government bonds dominated action on financial markets during the past holiday-shortened week, as angst about inflation and massive issuance propelled yields to six-month highs in the US, Europe and Japan.

Bonds and other safe-haven assets such as the US dollar were out of favor as signs of a bottoming of global economies, albeit tentative, emboldened investors’ appetite for reflation trades like equities and commodities, including oil and precious metals.

Read more about this, together with some thought-provoking news items and quotes from market commentators during the past week, in the weekly “Words from the Wise” review.

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