In Credit - Economy Interrupted

Core government bonds performed reasonably well last week with yields lower in most places. Backward looking economic news pointed to the interruption of economic activity between March and June. Data in the US illustrated an over 9% decline in quarterly output, while in Europe German GDP fell by over 10% and worse still Spain showed an 18.5% contraction. For Europe as a whole there was a quarterly decline of 12.1% These ‘risk free’ markets were also buoyed by the lack of progress in fiscal policy in the US where the $600 a week payment to some workers came to an end at the close of the week without a replacement.