By Robin Marshall, director, fixed income research
G7 sovereign bond yields fell sharply in Q1, to all-time lows, as fixed income markets moved much faster than equity markets to discount a major economic shock, and possible recession, from the coronavirus contagion. Since early-March, however, government bond yields have recovered sharply and yield curves steepened, in response to the enormous scale of the fiscal and monetary stimulus unveiled by policymakers (with fiscal stimuli of 20% to 25% of GDP in some cases). These recent moves suggest the bond market may be looking through the deep dislocation