Commentary: Markets have ignored many risks for too long

Frankfurt The word turning point is overused – but there are hardly any other terms that can adequately describe the tremendous upheavals of the past months and years. The outbreak of a pandemic, war, inflation and geopolitical power struggles that could lead to the end of globalization – an ugly list, but the global capital markets were hardly impressed by it for a long time.

After their low in March 2020, share prices are now clearly in positive territory. The situation on the bond market was similar. Only at the beginning of this year did the yield on ten-year Bunds reach positive territory.

The global bond business shows that the turning point will nevertheless leave deep marks on the markets in the long term. An important index of the information service Bloomberg, which tracks global government bonds and corporate bonds of good quality, has fallen by 20 percent since its peak in January 2021. This mark is considered a signal for a longer phase of weak prices. This marks the end of a decades-long boom.