to more than 2% of GDP in a sharp policy shift since Russia's invasion of Ukraine, along with committing 100 billion euros to a fund for its armed services.
The ongoing conflict's global macroeconomic repercussions are expected to exert further upward pressure on government funding needs, while tighter monetary conditions will increase government funding costs, the report highlighted. However, Janus Henderson noted that divergence is now emerging as a key theme, as central banks in the U.S., U.K., Europe, Canada and Australia look to tighten the policy strings to contain inflation, while China continues to try to stimulate the economy with a more accommodative policy stance.
Janus Henderson also believes shorter-dated bonds look attractive at present relative to riskier long-term ones.