The war in the Middle East shows little sign of coming to an end, and the price of oil might be surging, but investors in the bond market are sending a surprising message – a recession is not on the horizon.
The numbers tell a story of two different worlds. While the S&P/ASX 200 has dropped more than 8 per cent since the United States and Iran began launching missiles on February 28, bond yields are at levels last seen in 2011. In a typical crisis, investors rush to the safety of government bonds, which pushes yields down in anticipation that growth will slow.
