Jonathan Schiessl, emerging market strategist, believes that economic recovery is what is driving the yields higher and it isn't a bad time to be in equities.
He said, "At this stage the yields are rising primarily due to the bond markets following equity markets a bit late. Equity markets were pricing in a global recovery whereas bond markets were stubbornly ignoring it."
"I think bond markets now are pricing in that recovery and therefore the risk of inflation. So for the time being I would say it is the recovery which is driving yields higher which historically isn't a bad time to be in equities. I will not say that this is the end of bull market in equities just yet."
"I still think that you probably need to be heavily invested in the US markets, particularly at the moment while there are these concerns going on with inflation. I also do like the look of emerging markets, commodities and the energy space," he said.
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