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. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

Bond Outlook November 30th

Recent short-term events are in tension with long-term fundamentals. Today we compare and contrast. Beware of currency risk, and be slow to lengthen maturities.

Bond Outlook [by bridport & cie, November 30th 2005]

The last week has seen swings in mood and expectations amongst investors:


  • The ECB on again/off again statements about raising the refinancing rate on 2nd December and questioning whether this is the beginning of sustained tightening
  • Contradictory evidence as to whether the housing bubble in the USA is deflating or not (overall home sales down but sales of new houses up)
  • Improved US consumer confidence and spending
  • The US 10 year yield not rising as many (including ourselves) supposed and the yield curve partially inversing
  • Evidence of improvement in European economies, but fears that the ECB rate rise and higher VAT in Germany will have negative impacts.

The EUR/USD exchange rate is particularly volatile, reflecting this uncertainty. It is not even really clear where the support for the USD is coming from. Asian Central Banks have reduced their purchases of T-Bonds, and so have the OPEC countries, who are rather putting their windfall wealth into local investments. It may just be a mass of private investors attracted by the higher yields in USD, but doubtful of the sustainability of this source of relative strength, or it may be mainly the impact of the "US Homeland Investment Act".

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