The yield of first-class bonds, finally, began to grow, giving hope to investors, but also may have a d The pressure on the government.
Despite the fact that yields on US Treasuries fell on Wednesday morning, the index is still at the highest level since June. The yield on German bunds last week rose for the first time since June.
The yield on 30-year Japanese also growing quite rapidly government bonds, returning about 0.5% return for investors, which is significantly above the June lows of around 0.02%.
Bond yields were under pressure for many years due to the central bank's policy. However, recent speculation about a possible increase in interest rates by the Federal Reserve System, as well as disappointing news from the Bank of Japan and European Central Bank contributed to lower bond prices, which led to a growth in their profitability.
Low profitability has long been a critical issue, because it forces investors to look for other riskier and higher-yielding assets. According to Fitch Ratings, investors in sovereign bonds receive a $ 500 billion less than the annual income is now compared with 2011.
The main benefit from lower bond yields obtained issuers themselves. If bond yields will remain at a low level, it can encourage the government to increase public spending, although this step carries its own risks.
Robert Grossman, head of macro and credit research at Fitch Ratings, said in a research note that "the continuing low borrowing costs, ultimately, can lead to an increase in the level of government debt and an increase in borrowing, particularly if global economic growth will remain weak."
Based on materials WELTRADE
