World Office Yield Spectrum 1H/2017

March 2017

Globally, monetary policy remains accommodative as global growth continues a below-average rate of growth. When reported, the numbers for the second half of 2016 are expected to show global growth marginally improving.

Growth in China has stabilised and the Government continues to support property markets and infrastructure spending. GDP in the US picked up in the September quarter of 2016 whilst growth in Europe and Japan remained at modest levels. Whilst conditions remain supportive of consumption growth around the world, business investment remains relatively subdued.

Labour markets globally have seen substantial improvement however the quality of work the wages offered and the part-time and contractual nature of the employment growth undermines the quality of employment growth. Substantial capacity through underemployment remains.

Consequently, headline inflation numbers remain below most central bank’s target ranges. Inflation expectations have been little changed over the past twelve months however a late pick-up in inflation expectations following the results of the US presidential election has seen bond yields move substantially at the end of 2016.

The capital markets have been relatively strong over the six months to end of December 2016 with the S&P500 finishing the six months up over 7 percent. European bourses fared better with most indices up strongly over the six months to December 2016. Bourses in Asia have been generally healthy over the last six months of 2016. 10 year bond yields have risen by an average of 44 basis points around the world in the past six months and average around 1.7%. The negative rates prevalent in Japan and Germany in mid-2016 have reversed to be 0.05% and 0.21% respectively.

Most of the move in global bond yields followed the outcome of the US presidential election in early November. The move in bond yields were associated with expectations of infrastructure spending, tax cuts, trade renegotiations and further support for economic growth. Expectations for rising interest rates in the US firmed.


Receive the latest research

Key contacts

James Macdonald

James Macdonald

Head of Research China

Savills Shanghai

+8621 6391 6688 Ext.605


Simon Smith

Simon Smith

Senior Director
Research & Consultancy

Savills Two Exchange Square, 23/F

+852 2842 4573