Once again the market is shaken by the collapse of government bonds. But why is there so much concern?
Keep moving forward The collapse of government bonds To the point where markets find themselves suffering from a situation where chaos is the protagonist.
The underlying causes of the collapse of government bonds
At this moment, it seems that a new era is coming to an end Very high rates For long periods. In fact, Germany appears to have reached its highest level since the 2011 debt crisis.
The situation does not look any better in Japan, where official interest rates are still below 0%, while bond yields are at the same value as in 2013. Instead, in Italy, the ten-year bond yield is 5%. .
But why does all this happen? The first point to take into consideration is the fact that I… Global bond yields appear to be rising.
In fact, given the net inflation in the prices of energy and food products, banks decided to do just that Reject any bet on interest rate cuts.
Even more worrying is the financial outlook following the bureau’s downgrade of the US rating in August.
In fact, last week Italy increased its deficit target, which sparked many negative reactions.
At this point, all that’s left to do is wonder where this will go Selling bonds.
US data remains resilient. Indeed, the Fed, faced with a stable economy, is convinced that high costs of money will not rise Affect the growth of the country.
Alternatively, in terms of the bond yield, when this increases, the cost decreases.
But why is all this worrying? Bond yields determine the cost of current financing, so each deposit affects the interest rate that different countries must pay.
Not very good news given the huge need for state funding.
This is a situation that has huge implications Its consequences on global markets The increase in yields went to pave the way for the third year in a row at the global level.
Due to rising global yields, there has been increased pressure on emerging markets, which has particularly affected riskier economies.
Therefore, it seems that it is precisely this situation that is leading to growing concerns about the continued downward movement of government bonds.
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