Bond Vigilantes: Key themes for global bond market in Q4

Tapering a closely eyed topic

As we move into the latter stages of 2021, tapering undoubtedly remains the dominant theme in global bond markets.

This is on the back of a resurgent US labour market, with the US having now recouped around half of the jobs lost during the Covid-19 pandemic. While some economic data has softened a little in recent weeks, September's Federal Reserve meeting suggests it is likely that tapering will begin by the end of the year, with more FOMC members now bringing their rate hike expectations forward from 2023 to 2022. Despite the prospect of a looming tightening in monetary policy, moves in Treasury yields have been relatively muted this year. There has certainly been no repeat of the ‘taper tantrum...