German Foreign Minister Guido Westerwelle, a leading FDP politician, likewise sought to shoot down the idea
of euro bonds on Monday, calling them «out of the question» on German state broadcaster ARD.
Only last week, the FDP thought it had Ms. Merkel's backing for its categorical rejection
of euro bonds.
Not exact matches
The European Central Bank on December 3 dropped one
of its main policy rates to negative 0.3 % from negative 0.2 % and said it would extend its
bond - buying program, under which it creates
euros to purchase debt, to at least March 2017.
Until now, the ECB has stated that it stands ready to increase the level
of bond purchases it makes in both duration and / or size, in case the economic outlook deteriorates in the
euro zone.
To be sure, some
of Germany's and Japan's
bonds are also at negative yields and not many expect either the yen or the
euro to appreciate anytime soon.
According to the Global Market Strategy team at JP Morgan, pension funds and insurance companies in the G4 - United States,
euro zone, Japan and Britain - will buy at least $ 640 billion
of bonds this year.
LONDON, May 3 - At a time when the impending withdrawal
of European Central Bank stimulus was expected to hurt southern European
bond markets, so - called «peripheral»
euro zone debt continues to outperform its higher - rated peers.
Traditional stores
of value include money (pounds,
euros, and dollars), stocks,
bonds, gold, and property.
BNP Paribas (BNP), the France - based bank, intends to cut its dividend and sell billions
of euros in
bonds as it looks to a $ 9 billion settlement with the U.S. government.
The yield on Greece's three - year
bond, which has surged from 4 % to 13.5 % since October, is now reflecting serious expectations that the country may end up outside
of the Eurozone and unable to repay its
euro - denominated debts.
LONDON, April 30 - Government
bond yields in the
euro area nudged higher on Monday as focus turned to preliminary inflation data from Germany and Italy, two
of the bloc's biggest economies.
The ECB announced in October that it will cut the level
of bonds it purchases every month, starting in January, to 30 billion
euros ($ 35 billion) from 60 billion
euros.
Some investors are now making calls that the
euro zone's central bank could end its massive
bond - buying program by the end
of next year, with a potential rate increase in the fourth quarter.
Italian
bonds have proved resilient in the last couple
of months, supported by stronger
euro zone growth as well as less Euroskeptic sentiment in the country.
Ten - year Italian
bond yields have risen 17 basis points to 4.55 percent, since the news
of an uncertain outcome spread on Monday but the Italian treasury is going ahead with a sale
of 6.5 billion
euros ($ 8.5 billion)
of 5 and 10 - year
bonds on Wednesday.
The impact
of Italy's inconclusive election results was limited to a mild sell - off in Italian
bonds and stocks, with the
euro gaining support from the creation
of a coalition government in Germany.
The most widespread opinion is that the European Central Bank is going to announce a new round
of bond - buying next week to try to stimulate the Eurozone economy, which will further depress the value
of the
euro and make the franc yet more attractive.
Launched three years ago to fight off the threat
of deflation, the ECB's 2.55 trillion
euro ($ 3.14 trillion)
bond purchase programme has kept borrowing costs low to induce spending and investment, all with the ultimate aim
of generating inflation.
7 So the exchange bondholders who have
euro - denominated
bonds may be able to convince courts in Europe to order that they get paid — and those orders might be effective, since they would be entirely outside
of U.S. jurisdiction.
But there's a pretty good argument that payments on Argentina's
euro - denominated
bonds never flow through the judge's jurisdiction: Argentina gives the money to a bank in Buenos Aires, which transfers it to a bank in Frankfurt, which holds it in the name
of a bank in Brussels, which transfers it to a London nominee for Belgian and Luxembourg clearinghouses, which pays it to bondholders.
BERLIN — Throughout the month, countries caught in the eye
of the European financial storm, including Italy, Spain and France, have repeatedly defied expectations, selling big batches
of bonds to the public at interest rates significantly lower than investors demanded at the height
of the
euro crisis late last year.
As a percentage
of GDP, more than half
of the outstanding sovereign
bonds in the developed world originated from countries or regions where negative interest rate policies are in place, primarily representing
bonds from the
euro zone and Japan.
Bloomberg reported Thursday that after Draghi's bold words about protecting the
euro last week, markets expect him to deliver some sort
of drastic action to do so and to relieve pressure on
bond yields, which have climbed steadily higher for Spain and Italy.
Bonds of Europe's most - indebted nations slumped as speculation resurfaced that the
euro region remains vulnerable to shocks as it emerges from the sovereign debt crisis.
FRANKFURT — The European Central Bank said on Thursday that it would begin buying hundreds
of billions
of euros worth
of government
bonds in an aggressive — though some say belated — attempt to prevent the eurozone from becoming trapped in long - term economic stagnation.
Mario Draghi, the European Central Bank president, said Thursday that the governing council agreed to a quantitative easing program that will see it buy up to 60 billion
euros» worth
of bonds.
The government also needs to refinance a 1 billion -
euro bond maturing in November and a smaller yen note due in July, according to data on the website
of the debt - management agency, known as AKK.
LONDON (Reuters)- At a time when the impending withdrawal
of European Central Bank stimulus was expected to hurt southern European
bond markets, so - called «peripheral»
euro zone debt continues to outperform its higher - rated peers.
Oil plunged another 4 percent, while safe - haven government U.S. and German
bonds, and the yen and the
euro, rallied as widespread fears
of a China - led global economic slowdown and currency war kicked in.
In addition, the Governing Council announced it would purchase asset - backed securities with underlying assets consisting
of claims against the
euro area non-financial private sector and
euro - denominated covered
bonds issued by monetary financial institutions (MFIs) domiciled in the
euro area.
But long - term government
bond yields fell to record lows for many
euro area countries after a speech by ECB President Draghi on 21 November, which stressed that the ECB will do what is required to raise inflation and inflation expectation by adjusting the size, pace and composition
of asset purchases, if the currently announced policies prove to be insufficient.
This initiated a further decline in 10 - year government
bond yields, which fell to all - time lows for nine large
euro area countries including France, Ireland and Spain by 26 November, the end
of the period under review (Graph 5, right - hand panel).
The consent, from more than 97 percent
of senior secured bondholders, follows similar approval from senior banking lenders and from holders
of its 1.3 billion
euros of high - yield
bonds issued via Lighthouse International Company SA, a unit
of Seat PG.
The
euro may be languishing now, but it could well rebound substantially over the course
of a typical five - or seven - year corporate
bond term, especially against emerging markets currencies that are on slippery footing themselves.
The volume
of euro - denominated «junk»
bonds fell by 50 % in the year to August 1, to a scant $ 27.5 billion, according to highyieldbond.com.
The restructuring will hand 90 percent
of the company's equity to the Lighthouse bondholders, who also receive a 65 million
euro «stub»
bond that will rank alongside the company's senior secured
bonds.
«Should the Portuguese situation continue to deteriorate, risk aversion contagion could quickly spread to other
euro zone member states»
bonds and other asset classes,» Adrian Miller, director
of fixed - income strategy at GMP Securities LLC in New York, wrote in a note to clients.
Draghi offered no indication
of any looming change in the bank's statement that it would continue purchasing 30 billion
euros ($ 37 billion) per month in
bonds at least through September, and longer if necessary.
Germany sold 4.03 billion
euros of 0.5 percent 10 - year
bonds Wednesday with syndications in Italy and Portugal to follow.
The financing needs coming due in the first quarter «imply that
euro area banks will not have extra money as a result
of the three - year auction to purchase European sovereign
bonds, using a carry - trade strategy, because the amount
of fresh cash is less than the amount
of bank debt that will mature during the quarter», Powell wrote recently.
During this two - year crisis investors have continually called on the ECB and
euro area leaders to «fix» the debt issue: by wiping out half
of Greece's debt, by protecting Italy's access to debt markets through
bond purchases, or by suggesting a levered EFSF, the
euro area's rescue vehicle.
Critically, ILP can allow all assets
of value — including cryptocurrencies like XRP, existing currencies like the
euro or US dollar, and other securities (stocks,
bonds, and commodities)-- to be exchanged by people.
A reduction from $ 60 billion to $ 30 billion per month was scheduled for the start
of 2018, but the dovish tone
of ECB President Mario Draghi's accompanying comments — emphasizing that the QE program could be extended beyond September 2018, and giving no indication
of an end date — came as something
of a surprise to market participants, sparking a rally in eurozone
bonds and a moderate selloff in the
euro.
Also, the ECB announced that it would buy up to 40 billion
euro of covered
bonds, but that should not be a big deal for covered
bonds are the best collateral so many banks will probably not be running for funding posting the highest rated debt.
Indeed, the supply
of dollar
bond issuance in this year's first quarter hit record levels, and those levels don't account for the increased use
of «reverse Yankee issuance,» whereby U.S. corporations issue into European markets denominated in
euros.
With the outlook for growth in the
euro area remaining fairly subdued, German
bond yields are now below those in the US after having been around 30 basis points higher for much
of the past year.
In the days since UK Prime Minister David Cameron confirmed the date
of the referendum, markets have experienced some volatility focused on UK - specific assets; spreads for some UK issuers
of euro - denominated
bonds have widened considerably for no apparent reason, which suggests to us that a lot
of Europeans are selling their UK exposure.
They're taking advantage
of low interest rates on
euro - denominated issues after the European Central Bank's decision to start buying investment - grade corporate
bonds in June — part
of its economic stimulus program.
LONDON (AP)-- European stock markets dipped Thursday while the
euro struck two - week highs against the dollar after the European Central Bank left its key interest rates unchanged and decided against extending the duration
of its
bond - buying stimulus...
It has cut its key rate to zero and is pumping 80 billion
euros ($ 90 billion)
of new money into the economy every month by buying
bonds from banks and companies.