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Fasdal: Why commodity crash may send yields even lower

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The market was expecting European core bond yields to rise after the deal on a new bailout for Greece. But according to Saxo Bank’s Simon Fasdal that hasn’t happened and here’s why.

It’s all because of the very low commodity prices, which are driving down inflation. This is forcing the market to readjust inflation expectations and starting to raise doubts about how aggressive the US Federal Reserve will be in terms of hiking rates, Fasdal says.

He looks at how the slump in commodities may impact European stocks and bonds and where investors may go looking for attractive yields.