Monday December 22, 2014 Search
Weather | Athens
13o C
8o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
Investors cool on world-beating euro bonds with ECB seen on hold

Lukanyo Mnyanda & David Goodman

After the European Central Bank’s June meeting sparked the biggest monthly gain in the region’s government bonds since January, investors are cooling on the debt, betting officials will refrain from more action on Thursday.

“The fireworks were last month and you can’t expect the ECB to do that every” meeting, said Christoph Kind, head of asset allocation at Frankfurt Trust, which manages about $20 billion. “The market prices look pretty ambitious and my personal fear is that we could see a correction in fixed-income markets and rates may move a little a bit higher. But this will only happen if inflation goes up again.”

Euro-region bonds earned 1.1 percent last month, the most since jumping 2.2 percent in January, after the ECB unveiled stimulus measures on June 5 designed to boost the currency bloc’s economy. That sent yields tumbling from Germany to Greece with the average yield to maturity on euro-area government bonds, as measured by Bank of America Merrill Lynch’s Euro Government Index, falling to an all-time low of 1.3039 percent last week.

German 10-year yields were little changed at 1.25 percent as of 9:28 a.m. London time, having fallen to 1.24 percent on June 26, 11 basis points from the record-low set in June 2012. The price of the 1.5 percent bund due in May 2024 was 102.335.

Italy’s 10-year bond yielded 2.84 percent, after dropping to an all-time low of 2.69 percent on June 9. Rates on similar- maturity Spanish debt were at 2.66 percent, up about 12 basis points from a record 2.542 percent reached on June 10.

ECB officials meeting in Frankfurt will keep the main refinancing rate at a record-low 0.15 percent tomorrow, according to all 54 economists in a Bloomberg News survey.

Frankfurt Trust still has a long position on the region’s so-called periphery because of the extra yield the bonds offer relative to German bunds, Kind said. He also preferred shorter- dated notes because “the ECB is not going to raise rates anytime soon,” he said. Securities with shorter maturities tend to be more sensitive to the outlook on central bank monetary policy, while longer-dated debt tends to be influenced more by inflation prospects. A long position is a bet an asset’s price will increase.

Most of the recovery trade in euro-area peripheral debt is over, Stephen Cohen, BlackRock Inc.’s chief investment strategist for international fixed income, said at a briefing in London on Tuesday. BlackRock is world’s biggest money manager with more than $4 trillion of assets under management.

Euro-area securities returned 7.3 percent this year through Tuesday, Bloomberg World Bond Indexes show. That’s the most among 34 sovereign indexes tracked by Bloomberg. Greek and Portuguese bonds led the gains with earnings of 30 percent and 16 percent, while Italian securities gained 9.2 percent, the gauges show. [Bloomberg]

ekathimerini.com , Wednesday Jul 2, 2014 (12:11)  
Draghi starts squaring QE circle in month of persuasion for ECB
Euro shaky on ECB and Greece, dollar keeps edge
Political saga is harming liquidity
Bad timing for tenders as oil rates decline
Prosecutor gathers depositions in Independent Greeks ´bribe´ probe
Comedian Lakis Lazopoulos is due to give evidence today as part of the investigation into claims by Independent Greeks that there was an attempt to bribe one of their MPs. The lawmaker in qu...
Government accuses SYRIZA and Independent Greeks of ´clear alliance´
Government spokeswoman Sofia Voultepsi accused SYRIZA on Monday of forming a “clear alliance” with Independent Greeks to prevent a president from being elected, which would lead to snap elec...
Inside News
SOCCER
Special day for Abidal, lucky one for PAOK
PAOK scraped through its Livadia challenge beating Levadiakos to remain on top of the Super League for Christmas, one point ahead of Olympiakos that enjoyed a great game at Kalloni and offer...
BASKETBALL
Explosive Barca unfazed by Panathinaikos, bomb scare
Panathinaikos lost 80-67 at home to Barcelona on Friday in a rather meaningless game at the end of the first group stage of the Euroleague, but the encounter will be remembered for the bomb ...
Inside Sports
INTERVIEW
‘Crisis of confidence will come back again and again,’ says Thomas Piketty
He’s treated like a rock star wherever he goes to lecture. His book “Capital in the 21st Century,” a study on income and wealth inequality from the 18th century to the present, recently tran...
COMMENTARY
Who lost Greece
If Greece collapses much will be said about where the fault lies. Sure, we all know the failings of Greek politicians. That said, much of the blame lies with outsiders who pushed Greece beyo...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
 RECENT NEWS
1. Prosecutor gathers depositions in Independent Greeks ´bribe´ probe
2. Government accuses SYRIZA and Independent Greeks of ´clear alliance´
3. Draghi starts squaring QE circle in month of persuasion for ECB
4. Euro shaky on ECB and Greece, dollar keeps edge
5. Special day for Abidal, lucky one for PAOK
6. Political saga is harming liquidity
more news
Today
This Week
1. Euro shaky on ECB and Greece, dollar keeps edge
2. Government accuses SYRIZA and Independent Greeks of 'clear alliance'
3. Draghi starts squaring QE circle in month of persuasion for ECB
4. Prosecutor gathers depositions in Independent Greeks 'bribe' probe
5. Greek PM offers compromise solution with elections by end-2015
6. Who lost Greece
Today
This Week
1. Samaras summons bond vigilantes with euro exit talk
2. High stakes
3. Europe's drama in Greece needs final act to avoid tragedy
4. A friendly yet firm message from Pierre Moscovici
5. On the edge but not gutless
6. Girl, aged 11, gives birth on Crete
   Find us ...
  ... on
Twitter
     ... on Facebook   
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2014, H KAΘHMEPINH All Rights Reserved.