Hot Markets, Cool Economies

• Over the past six months, most equity markets worldwide have made substantial gains. While emerging market equities have underperformed in 2013, many U.S. equity indices (and Germany’s DAX) have recently reached new record highs.
• Bond yields have also fallen and credit spreads tightened, including for sovereign debt of troubled Euro Area countries.
• The financial market rallies have been in response to mixed signs for economic growth—first quarter GDP data seem to disappoint everywhere including the U.S., China and even the feeble Euro Area—which have fed into expectations of further monetary easing in both mature and emerging market economies.
• As such, market behavior can be said to be comfortingly familiar—evidence that investors have recovered from the risk aversion seen earlier and moving back to normality.

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Following the publication of the Capital Markets Monitor Hung Tran hosted a teleconference on May 7, 2013. The recording of the briefing and the Q & A session is now available for replay.

Download the teleconference (.mp3)