Rates getting real

September was a rough month for global investors with bonds and equities selling off. On the one hand, this is not unusual as September returns are on average negative for global equities. It is not clear why this is, nor is it a good enough reason to trade in and out of the market (as the old aphorism “sell in May and go away” would suggest). Bonds, however, do not normally fall in September and typically rally when stocks are under pressure. This time, however, there is a clear reason for the weakness across both asset classes. The common factor is that global markets seem to have finally come round to the higher-for-longer interest rate view that I’ve written about here for some time.