Wednesday saw a dramatic selloff in German governmentbonds, with the yield on Deutschland's 10-year debtjumping from 0.1005 percent to as much as 0.1641percent in the course of a single trading day. Bill Gross, thebillionaire bond manager who had just on Tuesday declaredGerman bunds “the short of a lifetime,” must surely bepleased.
|Deutsche Bank strategist Jim Reid has some thoughts:
… [The] move may well have been the second largest onrecord now, with yields now more than doubling from the lows onMonday of 0.075%. The move in Gilts was also pretty sizable tooafter a hawkish set of BoE minutes with 10 year yields climbing+14.7bps to 1.713%—the worst single-day yield move since 28thAugust 2013. With regards to the Bund story there doesn't seem tobe one key driver and it seems to be due to a combination of 1) theBoE-led Gilt move, 2) the big rally in Greece yesterday reversingsome flight to quality trades and 3) perhaps some follow on fromBill Gross's tweet on Tuesday that Bunds were 'the short of alifetime' better than the pound in 1993 and that the only questionis timing/ECB QE.
As of Thursday, the yield on the benchmark 10-year bund ishovering around 0.42 percent.
|Copyright 2018 Bloomberg. All rightsreserved. This material may not be published, broadcast, rewritten,or redistributed.
Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.
Your access to unlimited Treasury & Risk content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Critical Treasury & Risk information including in-depth analysis of treasury and finance best practices, case studies with corporate innovators, informative newsletters, educational webcasts and videos, and resources from industry leaders.
- Exclusive discounts on ALM and Treasury & Risk events.
- Access to other award-winning ALM websites including PropertyCasualty360.com and Law.com.
*May exclude premium content
Already have an account? Sign In
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
