The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.

Bond Outlook July 13th

If US household earnings really have gone up - increased fiscal income for the Administration supports the idea - then inflation beckons and the 10-year yield cannot stay so low much longer.

Bond Outlook [by bridport & cie, July 13th 2005]

There have been two reversals of conventional wisdom over the last few days:


  • That revaluation of the RMB is no longer a betting certainty, as China is slowing anyway
  • That the ECB's cut in the refi rate may no longer be counted on, as a lower EUR and higher oil prices have brought back too great a risk of inflation.


The second of these opinion reversals may explain the modest recovery of the EUR against the USD. However, the higher yields in USD are supposed to give strength to the USD short term, even though the downward pressure of the "twin deficit" is expected to re-assert itself in months rather than years.


The uncertainty about exchange rates explains and reinforces our recommendation and the behaviour of many of our clients to diversify the currency of their bond holdings as much as possible. The commodity-currencies may have had their day for a while, and it is now the turn of peripheral European, Latin American and Asian currencies.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree