Dollar, Mortgage Bonds Offer Opportunities as Central Banks Diverge

The divergence between central banks will continue to offer major opportunities for the dollar to strengthen against the Euro and Japanese yen, said Eric Stein, portfolio manager at Eaton Vance. Stein said his base case is that the Fed will hike in the middle of 2015, but they will likely hike faster than the market is pricing in right now because U.S. economic data has generally been stronger than expected. Stein added that he likes agency bonds due to the strengthening housing market. Finally, he said there are still some good bond opportunities in emerging markets such as India and Sri Lanka.