Optimism and recovery dominated investor sentiment during a quarter in which the inflation debate remained centre stage.

Government-bond investors experienced a brutal three months as worries over the outlook for inflation continued to grow.

While Covid-19 meant that new-year fireworks celebrations were scaled back, markets saw some pyrotechnics during 2020’s final quarter.

For much of the quarter, financial markets also appeared to have returned to business as usual.

Equity markets appeared at times to be detached from reality as they rebounded strongly during the second quarter.