John Wraith, head of U.K. rates strategy and economics at UBS, discussed the impact of trade tensions on investment flows and the spread between U.S. and core euro-zone bond yields with Bloomberg.
Points discussed during the interview:
- More capital inflows into ETFs in the U.S. correlated with outflows of capital from Europe as investors look for safe havens
- A lot of strength moving the U.S. recovery since the Financial Crisis of 2007-08
- The U.S. Federal Reserve remains on course to raise interest rates for the rest of 2018 and possibly beyond
- Yields moving higher on shorter-dated bonds, increasing its appeal
- Trade concerns and questionable economic recoveries taking place in other parts of the world
- Investors are nervous, but see opportunities in varying growth rates around the world
- Opportunities can be found in seeing through trade fear news–spread between government bond yields is highly unusual and could represent an opportunity with high Euro-zone bond yields
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