Tag Archives: Bonds

Austria, Spain followed Italy by selling long-term debt | Instant News

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April 13 (Reuters) – A 50-year bond sale from Austria on Tuesday will test further investor interest in ultra-long-dated debt after high demand for a similar sale from Italy last week, while Spain will sell a 15-year newspaper.

The prospect of a substantial new supply helped push bond yields in the euro area slightly higher in early trading Tuesday. Bond yields move inversely with prices.

The two countries sold their debts, also including four-year bonds from Austria, through a syndication, in which issuers use banks to sell their debt directly to investors, according to a lead manager memo seen by Reuters.

Investors must also digest the reopening of 15-year bonds from Italy to 2 billion euros, 1 billion pounds of 50-year bonds from the UK, and $ 24 billion in 30-year US bonds, all of which will be sold through more traditional means. auction format.

German 10-year yields, the benchmark for the bloc, were up by about a basis point to -0.29% at 0738 GMT. ING analysts said they expect Tuesday’s supply to cause long-dated government bonds to underperform.

The deal follows last week’s publication of a 50-year syndicate from Italy, which received nearly 13 times the demand for the five billion euros it raised.

After a strong start to the year, sales of ultra-long debt have slowed since February, when yields rose sharply as investors bet that a large US fiscal stimulus package will reignite growth and inflation that hurt safe-haven bonds.

France, Belgium and Spain all sold their 50-year bonds earlier in the year as they tried to lock in lower borrowing costs. But all of those bonds fell sharply during the volatile February patch.

The European Central Bank has since calmed European bond markets by increasing the rate of buying its assets.

The price of a 50 year bond, among the longest term issued by the government, is more sensitive to changes in the benchmark interest rate. The fact that the ECB, whose asset purchases have pushed down the euro area’s borrowing costs, has not purchased bonds in more than 30 years adds additional sensitivity.

On the data front, investors will be watching the German ZEW investor morale survey and US inflation data. A Reuters poll forecasts US inflation to jump 2.5% year-on-year in March, from 1.7% in February.

Reporting by Yoruk Bahceli; Edited by Catherine Evans


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Yields on German 10-year Bund fell to a 5-week low on coronavirus concerns | Instant News

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LONDON, March 24 (Reuters) – German 10-year bond yields fell to a five-week low on Wednesday, a sign of growing discomfort over the eurozone’s economic outlook amid tighter restrictions to contain the new wave of COVID-19.

Across the single currency bloc, the 10-year bond yields fell by 2-3 basis points as investors returned to the safe-haven bond market.

France has reintroduced lockdowns and Germany has extended lockdowns to April 18. Signs of an increase in the European Central Bank’s rate of bond buying may also help explain the move lower in bond yields this week.

“While Bund yields may struggle to break below the current range, refocusing on the domestic pandemic front against the backdrop of increasing ECB buying – even if only slightly – could contribute to keeping yields lower for now,” said Benjamin Schroeder, senior interest rate strategist. on ING.

The yield on the German 10-year Bund fell to -0.375%, the lowest level in five weeks. That’s down about 7 bps this whole week.

Germany will auction off 4 billion euros of 10-year bonds at a later date.

Focus in the meantime shifted to the release of the flash purchasing managers’ index in the euro area countries.

France’s Flash Composite PMI rose to 49.5 in March from a final reading of 47 in February, data showed.

While the PMI data is considered a forward-looking economic indicator, the latest release may have a muted market impact, given the new spike in coronavirus cases and tighter restrictions likely to weigh on economic activity going forward, analysts said. (Reporting by Dhara Ranasinghe Editing by Gareth Jones)


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German Bund yields hit new 8-month highs as reflex trading hit | Instant News

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LONDON, Feb 22 (Reuters) – Germany’s benchmark 10-year bond yields climbed to a fresh eight-month high on Monday, as bets on stronger economic growth and inflation in the coming months continue to put pressure on borrowing costs in the region. euro. .

So-called reflex trading was once again led by long-dated US Treasury yields, which on Monday climbed to their highest in about a year.

That set the tone for trading in the European bond market, with the yield on German 10-year Bund rising to -0.28%, a fresh eight-month high. That was up nearly 12 basis points last week, the biggest weekly jump since June.

The sell-off has sharpened Germany’s yield curve, with the gap between 2- and 10-year bond yields widest in nearly a year, at around 39 bps.

“In our view, this is not a buy-on-dip environment in interest rates, and sharp cuts have yet to be carried out,” said analysts at Mizuho in a note.

Perhaps a more worrying sign for policymakers, real or inflation-adjusted bond yields have also risen sharply in the past week. Germany’s 10-year inflation-related yield on Monday rose to -1.28%, the highest since last October.

Analysts at UniCredit say the rise in real yields has gone too far.

“Even general optimism about the global growth prospects will not be enough to justify the current 10-year Bund real rate of return,” they said in a note.

Focus now turns to central bank officials and their thinking about soaring borrowing costs, which could threaten an economy that is slipping into recovery from the coronavirus crisis.

European Central Bank chief Christine Lagarde is expected to speak on Monday evening, while US Federal Reserve Chair Jerome Powell delivers semiannual testimony before Congress on Tuesday.

Most 10-year bond yields in the euro area rose by 2-3 basis points on the day. The yield on Italian 10-year bonds rose 2.5 bps to 0.64%, 22 bps above the record low reached earlier this month.

Europe will decide whether to extend its suspension of rules limiting its budget deficits and debt, known as the Stability and Growth Pact, in the coming weeks, meanwhile Economic Commissioner Paolo Gentiloni said on Monday.

Reporting by Dhara Ranasinghe Editing by Gareth Jones


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Germany, most other eurozone bond yields hit multi-month highs | Instant News

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LONDON, Feb 15 (Reuters) – Most eurozone bond yields rose to multi-month highs on Monday with investors betting on brighter economic prospects and rising inflation as oil prices climb to their highest in more than a year.

Ten-year bond yields in Germany, France and the Netherlands all rose to their highest levels since early September, while yields on German 30-year bonds climbed to eight-month highs.

The selloff in major bond markets has picked up in recent sessions, as the launch of the coronavirus vaccine and US fiscal stimulus fueled expectations of a strong economic recovery.

The benchmark US Treasury yield rose to the highest level since March on Friday, pushing prices lower. This sell-off, along with the rise in the price of Brent crude to highs above $ 63 a barrel weighed on eurozone debt markets on Monday.

Germany’s benchmark 10-year Bund yield rose 4 basis points to a 5-1 / 2 month high of -0.387%.

The yield on the 30-year bond, up 20 bps so far this month, is up to an eight-month high of nearly 0.13% – after trading in negative yield territory more than a week ago.

Across the euro area, yields on long-term bonds in higher-rated markets such as the Netherlands and France rose 4-5 bps points on the day.

“The reflective sentiment remains alive and kicking, albeit with opportunities for short-term consolidation in the Bunds following the latest selloff,” said Commerzbank strategist Rainer Guntermann.

With the US bond market closed for the holidays and parts of Asia closed for the Lunar New Year, trading on financial markets was generally sluggish.

Italian bonds continued to outperform their eurozone counterparts but their yields also edged up Monday, with the Italian 10-year bond yield up 2 bps on the day at 0.51% – still maintaining last week’s record low.

Mario Draghi, the former head of the European Central Bank, was sworn in as prime minister of Italy on Saturday to lead a unity government that must steer the country out of the coronavirus crisis and economic downturn.

Politics is also in focus in Spain, where separatist parties are likely to jointly win a majority of seats in Catalonia’s regional parliament. The elections are seen as a test of the strength of the regional pro-independence movement in an era now dominated by the pandemic.

Reporting by Dhara Ranasinghe; Edited by Pravin Char


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German bond yields rose to a five-week high as US yields surged on Georgia’s calculations | Instant News

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LONDON, Jan 6 (Reuters) – German 10-year bond yields climbed to their highest level in nearly five weeks on Wednesday, boosted by surging US Treasury yields, amid expectations that a victory for Democrats in the second-round Senate election in Georgia may be signifies more fiscal spending.

Democratic challenger Raphael Warnock wins a fiercely contested US Senate race in Georgia over Republican incumbent Kelly Loeffler, the projected TV network and Edison Research. The second runoff remains undecided, leaving Senate control in the air.

Democrats must win both contests to take control of the Senate, raising the prospect of more fiscal stimulus and inflation – scenarios that bond markets seem to be betting on.

As 10-year US Treasury yields rose above 1% for the first time since March, with the sharpest yield curve since 2017, European borrowing was heading higher in early trading.

In Germany, the euro area’s benchmark issuer, the 10-year bond yield rose to -0.53% – the highest in nearly five weeks.

Most 10-year bond yields in the eurozone rose by about 4 to 5 basis points on the day. UK gold yields hit two-week highs, a sign of a broader trend in world bond markets.

“If market expectations of a Democratic double win in Georgia are confirmed, gains above 1% should be sustained,” said analysts at ING, referring to 10-year US Treasury yields. “But it will feel better later in Q1 when the worst impact of Covid has passed.”

Bond strategists said the proven trade reflections in the US bond market will likely be less pronounced in the euro area, where inflation is likely to be further pressured by weak economic activity, given new restrictions to contain the coronavirus.

Reporting by Dhara Ranasinghe, editing by Larry King


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