As we said earlier the banks have soared over the last few months e.g. the average return of the “Big 4” year-to-date is already well over 10%. While a clear tailwind for the sector has been created by the strong property market as it reduces the risks of bad debts, at MM we believe the main bullish factor is rising 10-year bond yields. At the moment global yield curves are steepening as central banks keep their weight on cash rates but remember equity markets look into the future and historically a steepening yield curve indicates investors are anticipating rising inflation and stronger economic growth, a great backdrop for the Banking Sector.
MM is bullish both longer dated bond yields and the banks
Add To Hit List
