Global bond markets generally are close to being fully valued, while the U.S. dollar should continue to rise, said Gordon K. Johns, managing director for Zurich Investment Management Ltd., London.
Because global bond markets have performed so well, they have become less attractive on a fundamental valuation basis, he said.
New Zealand is a big exception; he calls it "the cheapest bond market in the world."
New Zealand has a strong central bank that is working hard to keep inflation at bay, resulting in interest rates that are high relative to inflation, he said. The United Kingdom and France also have relatively good values.
While Mr. Johns is bullish on the U.S. dollar, he is somewhat bearish on U.S. bonds. He said he expects the dollar to continue in its generally rising trend, getting support from relatively strong U.S. economic growth, a falling trade deficit and relatively low U.S. interest rates.
And because interest rates have fallen so much in the United States relative to the rest of the world, other bond markets look better, he said.