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Bond investors worry about fueling debt levels

Bond investors and CIOs highlight mounting government debt as a potential trigger of a new recession or market crisis, a new study finds. More than one in three even anticipates a stock market crash within twelve months due to growing risk.

The debt levels in China are mentioned as a potential trigger of a market crisis. | Photo: Thomas Borberg

Bond investors see high debt levels as the most significant concern for the global economy. This is one of the conclusions of the global fixed income study by US-based asset manager Invesco, which interviewed 145 bond investors and CIOs.

More than three-quarters of the respondents even consider high government debt as a possible trigger of a new recession or market crisis. Another source of uncertainty stems from a possible new crisis in emerging markets, for instance, growing Chinese debt, partly fueled by shadow banking. Additionally, high commercial and consumer debt were also often mentioned as a probable causal factor of a recession or market correction.

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