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.
Banking

Bond Outlook March 8th

This has been week of two key changes, closely linked: long-term yields are at last rising and emerging markets are seeing a correction in bonds and stocks.

Bond Outlook [by bridport & cie, March 8th 2006]

This has been a week with two major global trends asserting themselves. They are linked:

 

  • Liquidity is decreasing and, with, it the ability of global GDP to maintain its momentum
  • Emerging markets have gone thorough a significant correction in both equities and bonds

 

All central banks are on a tightening path with the possible exception of the BoE. For the Fed and ECB it is a matter of degree, but for the BoJ a fundamental change in direction is finally happening – from zero to positive interest rates in both nominal and real terms (as deflation ends). Recently we have seen this change as simply introducing a shift in relative attractiveness for private Japanese investors from T-Bonds to JGBs. Yet it is more than that: the policy change implies the removal of a sizeable piece of liquidity from world financial markets. The rising bank rates in other industrialised economies are doing the same thing, and are, at last, washing through to long-term yields.

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.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

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

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, 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

LOGIN NOW

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