it is funny that some folks believe that yellen had pulled the plug on the party-machine 2013, and have faith that the usa can 'afford' to stopping QE whilst europe, china and japan cannot, not withstanding that europe has much savings to plough through, china, in so far as cost of money is concerned is in comparatively normal monetary, and japan is hanging tough after 30+ years of hyper monetary space travel
that is what makes a market, otoh "2026 TeoTwawKi ... 2032 Darkest Interregnum", and otoh "The Financial Collapse of 2001 Unwinding"
i had always been of the opinion that one's geographic location matters much to the inclusiveness of one's macro take, irrespective of the state of electronic connectivity that supposedly puts all on the same playing field
you saw below ... am guessing there is plenty where that ummmmmnph comes from; just a guess.
ft.com
Ireland raises €4bn in negative yield bond sale
yesterday
Ireland has sold its first ever bond with a coupon of zero per cent, with the country effectively being paid to borrow €4bn over five years.
The country brought in more than €10bn of orders for the debt, which matures in 2022. The bond, which is priced slightly above par, came at a yield of minus 0.008 per cent.
The absence of the coupon means Ireland will not have to make any interest payments on the bond, which will mature at a slightly lower value than that at which it was sold.
Investors who hold the debt to maturity are guaranteed to lose money.
Swathes of European sovereign debt have been trading at negative yields over recent years, with historically low rates and more than €1.7tn of government bond purchases from the European Central Bank forcing asset prices higher.
The German five year bond is currently trading at minus 28 basis points. Both Finland and Austria have this year issued bonds with zero coupons.
Ireland issued a 5-year bond in 2012 at a coupon of 5.5 per cent, in the midst of Europe’s sovereign debt crisis. In 2015, they issued a 7-year bond with a coupon of 0.8 per cent.
More than a third of demand for the new Irish debt came from asset managers, with banks also providing 35 per cent of the book. Hedge funds represented 17 per cent of demand.
Irish sovereign bonds have performed well compared to other European countries over recent years, with the country’s assets buoyed by perceptions of economic recovery.
The yield on its 10-year debt is currently at 0.72 per cent, significantly lower than Spain, which is trading at 1.78 per cent, but above the 0.33 per cent it touched last September.
BNP Paribas, Citi, Davy, Goldman Sachs, NatWest and Societe Generale were on the deal. |
