The outlook for government bonds is also mixed. Concerns about future policy have already driven the gap in yield between French government bonds and their German counterparts to a multi-year high, and this trend is likely to continue until a new government takes shape in France.
Investors looking to capitalise on the economic revival, while avoiding both the potential equity volatility and the increases in some government bond yields, may choose to consider the European investment grade and corporate bond markets for their regional exposure.
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Nandini Ramakrishnan is a global market strategist of JP Morgan Asset Management
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