Trump's victory has sent the bond markets into disarray,
with the yield on government bonds rising steeply.
Not exact matches
This year's budget provides a sensitivity analysis for
yields on 10 - year
bonds; should interest rates fall in line
with the BMO projections, the Ontario
government will see estimated gains of $ 400 million next year alone.
Rising inflation expectations in recent months have been reflected in U.K.
government bond (gilt) prices
with the
yield on 10 - year gilts touching its highest level since April this year at 1.509 percent in Monday's session.
Treasury
yields edge lower
on Thursday,
with the 10 - year
government bond hanging around its lowest level in about seven weeks
Looking ahead, we may see rising
yields along
with a continued focus from the
government on tax reform, and such a move could hurt the relative attractiveness of muni
bonds.
Trading across U.S.
government bond maturities was range - bound
on Wednesday,
with yields little changed in spite of gains in the equity market in the last few sessions.
Caused by worries of a summer interest rate hike and uptick in the U.S. dollar, gold and silver both stalled in May but have since rallied
on the back of Brexit and
with government bond yields in freefall.
Which explains why
yields on two - year
government bonds in Canada have surged in recent weeks and are now at about parity
with the U.S.
U.S. stocks plunged
on Tuesday,
with the Dow Jones Industrial Average sinking more than 400 points as rising
government bond yields drove investors into risk - off mode...
With the exception of the very front end of the
yield curve, Canadian
government bond yields declined, as did spreads
on investment grade corporate
bonds.
The continuing low level of
government bond yields has supported the search for
yield that has been evident over the past couple of years,
with the spread between
yields on US
government debt and
yields on both corporate and emerging market debt remaining around historical lows over the past three months (Box B).
The extent to which the valuation of U.S.
bonds is out of sync
with the U.S. economy is best illustrated in the graph below in which the
yield on the 10 - year
government note is depicted against the Conference Board Consumer Confidence Index.
German 7 - year
government bonds yielded minus 35 basis points
on Sept. 14, compared
with minus 47 basis points
on Sept. 9.
It's important to compare investments
on an after - tax basis: you might appreciate the guaranteed
yield of
government bonds, but
on an after - tax basis, you'll likely do better over the long - term
with dividend stocks.
As a result,
yields on government bonds with maturities of 10 years or less are negative, according to Bloomberg data.
Mortgage rates generally rise and fall along
with yields on Treasury notes and
bonds because those
government securities reflect the overall direction of interest rates.
The extent to which the valuation of U.S.
bonds is out of sync
with the U.S. economy is best illustrated in the graph below in which the
yield on the 10 - year
government note is depicted against the Conference Board Consumer Confidence Index.
The present value of the principal outstanding at the date of maturity is calculated at an interest rate differential discounted at the «
Yield of
Government of Canada
Bonds»
on the market
with the equivalent term to maturity plus 0.90 %.
A callable
bond with a call price based
on the greater of (a) par or (b) the price based
on the
yield of an equivalent - term
Government of Canada
bond plus a specified
yield spread.
As for specifics
on what the BOJ had to say, well, the BOJ maintained its current monetary policy, including its so - called QQE
with yield curve control framework that targets the
bond yields of 10 - year Japanese
government bonds.
Depending
on your comfort level, the idea of choosing fixed income other than
government bonds / GICs / cash has some appeal (especially
with historically low gov» t
bond yields) but just be sure you understand the products you are buying, the inherent risks, the embedded options, the liquidity, the seniority of the debt.
The present environment is characterized by unusually overvalued, overbought, overbullish conditions,
with rising 10 - year Treasury
bond yields, heavy insider selling, valuations
on «forward earnings» appearing reasonable only because profit margins are more than 70 % above historical norms (fully explained by the negative sum of
government and personal savings as a share of GDP),
with the S&P 500 at a 4 - year market high, in a mature market advance,
with lagging employment indicators still positive but more than half of all OECD countries already in GDP contraction, Europe in recession, Britain
on the cusp, and the EU imposing massive losses
on depositors in order to protect lenders in an unstable banking system where Cyprus is the iceberg's tip.
With yields on «risk - free» assets such as
government bonds so low, the higher valuations for risk -
on assets like equities might be justified.