August: Japan may unveil its stimulus measures at the start of the month. Goldman Sachs analysts say Abe may want to pursue a fiscal and monetary policy mix to supplement one another and elicit a strong market response, but add that more Bank of Japan easing is uncertain.

November 11: U.S. presidential elections due. Both Donald Trump and Hillary Clinton have suggested they will step up infrastructure spending, though much will depend on the votes for the House and the Senate as a divided government may create more obstacles to a policy shift.

November/December: U.K.’s Autumn Statement

What Does It Mean For Investors?

A shift toward fiscal stimulus would suggest an increase in the supply of government bonds, which would lift yields and steepen curves, Morgan Stanley analyst Andrew Sheets says. Such a move would be quite supportive for banks and should drive a rotation within equity markets, he adds.

Bank of America Merrill Lynch’s Woo says we could see easier fiscal policy in the U.S. if one party gets a clean sweep in the presidential vote and both houses of Congress. Unless that happens, Woo remains concerned over the effectiveness of further easing more generally and doesn’t expect the latest rally in risk and cyclical assets to have legs.

The U.K. credit rating downgrade and the pound’s fall could limit Britain’s ability to ease as market will determine how much it can do, Woo says.

Gilts are likely to underperform other sovereign markets, especially European government bonds, on a 12 to 24 month view as easier U.K. fiscal policy would mean a bigger supply of gilts and possibly an acceleration of growth, Woo adds.

The outlook for core European government bond yields looks increasingly asymmetric to the upside, and the rate complex could become more volatile, BlueBay’s Russel Matthews says. Growing expectation that fiscal policy will be the new channel for stimulating growth and inflation is an important factor in that, he adds.

UBS private banking’s Bill O’Neill says the U.K.’s policy emphasis will shift toward fiscal measures over the next 12 to 18 months. While there would be more gilt issuance, there’s huge market appetite, though it does provide a floor for yields around current levels, O’Neill says.