Time to Get Tactical on European Rates as Returns May Fall
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Investors may have to get more tactical in 2020 given the impressive returns from European government bonds this year could become much harder to achieve.
Ten-year German yields may well remain in a broad range. Euro-area cyclical indicators have risen off recent lows and if the U.S. and China reach an initial trade deal then yields will likely reprice higher ahead of economic data improving. However, a strong recovery and higher inflation remains elusive, narrowing the room for yields to increase above 0%.