Bonds regain appeal as yield curves steepen
The analysis highlights a strengthening investment case for longer-duration bonds. Elevated policy rates alongside steeper yield curves have improved the income and diversification benefits of fixed income within portfolios.
At the same time, energy-driven shifts in inflation expectations have contributed to rising sovereign yields in several developed markets, underscoring how geopolitical developments continue to influence bond market dynamics.
Structural changes linked to artificial intelligence are also reshaping sector allocation decisions. The report pointed to a growing performance gap between technology hardware firms and software providers, reflecting uneven distribution of AI-related investment and earnings potential.
South Korea was identified as a key beneficiary of the expanding AI supply chain, with the country positioned as a critical “picks and shovels” provider supporting the technology investment cycle.
Oil volatility yet to trigger major market repricing
Although oil prices have experienced significant swings tied to geopolitical tensions, broader financial markets have shown limited signs of stress. Equity declines, widening credit spreads and currency volatility have been relatively contained compared with previous energy shocks.