Why AllianzGI's Riddell is more bullish on government bonds than ever

Anticipates a significant bond rally

There has rarely been a more attractive time than now to add exposure to longer duration government bonds, according to Mike Riddell, head of macro and unconstrained fixed income at Allianz Global Investors.

In his latest Bond Issues paper, Riddell said he anticipates a major bond rally, citing the fact that inflation has likely peaked in most countries and global growth momentum appears to be slowing down.  "From having had a slight bias to be long of rate duration pre Covid, we were very underweight developed market rate duration from summer 2020 to Q1 2022, on the view that insufficient rate hikes were priced into developed markets," he explained. "We continue to want to be positioned defensively, and expect risk assets to come under further pressure. But rates markets now appear to be...