It was all so simple and easy to explain until a month ago – what was good for equities was bad for bonds.

As the debate raged about the economic outlook, investors bought equities and sold bonds if they were bullish about growth, particularly in the US, and vice versa if they were bearish. So, as concerns about a US recession receded between the bail-out of Bear Stearns (March 17) and mid-May, global equities rallied sharply, while bond prices fell.