2021 Q1 Outlook: Fixed Income
We previously highlighted the binary nature of the key risk events in the final quarter of this extraordinary year. Greater political certainty in the US, combined with positive news on both the efficacy and deployment of COVID-19 vaccines, have given investors the green light to add risk.
While the US Presidential Election provided plenty of drama on the night, it failed to deliver the ‘Blue Sweep’ that would have given the Democrats control of Washington.
While we acknowledged that these events had the ability to move markets significantly, we were somewhat shocked by the strength of returns delivered in November alone. If risk assets continue to rally into the end of the year, the valuation set-up for 2021 will be remarkable.