Not exact matches
As noted earlier, arbitrageurs obtain a twofold gain: the margin between Brazil's nearly 12 % yield on its long - term
government bonds and the cost of U.S. credit (1 %), plus the
foreign - exchange gain resulting from the fact that the outflow from dollars into reals has pushed up the real's exchange
rate some 30 % — from R$ 2.50 at the start of 2009 to $ 1.75 last week.
Government bonds have typically been more sensitive to changes in U.S. interest
rates, as they have a much higher proportion of
foreign buyers and sellers from countries where local
rates might be more stable or moving in the opposite direction.
Rather, the increase in spreads appears to reflect both tightness in the Commonwealth
Government bond market (where supply remains limited and demand by
foreign investors appears to have increased) and upward pressure on swap
rates (one benchmark against which corporate
bonds are priced) as companies have sought to lock in fixed -
rate borrowings due to expected increases in interest
rates.
While a weaker dollar may boost U.S. exports and the profits of U.S. companies with overseas operations, weaker
foreign demand for U.S. Treasury
bonds would push up long - term interest
rates, raising mortgage payments for U.S. homeowners and borrowing costs for an indebted
government.
It is worth noting that although net
foreign flows into
government bonds have been muted, investors rotated out of both nominal and real
rates, adding to bills (Chart pack available on request) and keeping exposure to Mexican pesos.
Document Types:
Foreign financing general; foreign banks; Exchange Fund Account; Government of Canada foreign loans issued; standby credit facilities; Canada bills; interest rate and currency swaps; Yankee Bond buyback program; foreign underw
Foreign financing general;
foreign banks; Exchange Fund Account; Government of Canada foreign loans issued; standby credit facilities; Canada bills; interest rate and currency swaps; Yankee Bond buyback program; foreign underw
foreign banks; Exchange Fund Account;
Government of Canada
foreign loans issued; standby credit facilities; Canada bills; interest rate and currency swaps; Yankee Bond buyback program; foreign underw
foreign loans issued; standby credit facilities; Canada bills; interest
rate and currency swaps; Yankee
Bond buyback program;
foreign underw
foreign underwriters.
Emboldened by the country's triple - A
rating and popularity with
foreign investors, the federal
government is looking at offering a 40 - year
bond for the first time.