With the increasing rollout of vaccines, many market observers are touting the recovery story as global economies reopen.
DBS Bank is one which is upbeat on recovery prospects, with chief investment officer Hou Wey Fook saying “encouraging signs of normalcy” are seen. “By no means are we saying the world has turned the corner in its fight with the pandemic. But recent developments in the US and parts of Europe are pointing towards a strong recovery,” he writes in DBS’s 3Q2021 CIO Insights report.
The report, titled Hope into Reality, reflects the bank’s optimism. But while investor sentiment has been buoyed by accelerating vaccination rates, a different set of concerns now appears on the horizon. In particular, Hou notes that inflation fears have become more pronounced, especially as commodity prices have bounced back. In addition, the dovish policies set by central banks last year to counter the onslaught of the pandemic are starting to normalise, with the Bank of Canada and the Bank of England among the first to start tapering bond purchases.