The financial markets have been focusing on the end of the coronavirus pandemic over the past six months. The markets have been anticipating that fears over the pandemic will subside and that everyday life will finally return to normal for consumers and producers. The economic data not only confirmed these expectations, but regularly exceeded them.
As a result, the prices of growth-sensitive assets – such as equities, commodities and corporate bonds – have risen sharply over recent months. In contrast, defensive assets – gold, secure bonds and the Swiss franc – have tumbled in value. Defensive assets usually rise in value when investors are anxious and equity prices begin to falter.