This second trend borne from ultra-loose monetary policy has forced many investors to seek out higher - yielding alternatives including dividend stocks, which, on average, yield more than 10 -
year government bonds in most major developed markets, including Canada (see chart below).
I thought it was interesting that on September 5 — the day after the announcement — two -
year government bonds in Germany, Denmark, Belgium, Netherlands, Finland, France, Austria and Ireland all had negative yields.
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.
The yields on 10 -
year government bonds in Italy dropped to 1.56 percent and in Spain to 1.39 percent.
Not exact matches
It buys long - term
government bonds, including those with durations longer than three
years,
in what is dubbed «rinban» market operations.
Under its current asset - buying and lending tool, the BOJ limits the duration of
government bonds it buys to three
years because it wants to push down the cost of borrowing for companies, many of whom work
in three -
year investment cycles.
Japanese
government bonds skidded
in their worst sell - off
in more than three
years, despite weaker stocks, accelerating a slide begun
in the wake of last Friday's Bank of Japan easing steps that disappointed many investors.
He has implemented a massive stimulus policy by cutting the central bank's benchmark interest rate to negative, keeping the 10 -
year Japanese
government bond yield near 0 percent
in an effort to control the yield curve and stepping up the Bank of Japan's asset purchases.
Tighter regulation on
bond markets has crimped appetite for
bonds in the region, he said, noting that subscriptions for three
government bonds issued at the end of last
year lagged expectations.
Poland's 10 -
year government bond yield rose 7 basis points to 3.14 percent, its highest level
in four weeks, rising more than U.S. and German yields which it often tracks.
«Over the last 15
years, the difference between the five
year government bond yield and the overnight Bank of Canada rate has been a reliable indicator of the trend growth
in the Canadian economy.
First, he believes that an investor
in a low - cost S&P index fund who reinvests all dividends will do better — very likely substantially better — than an investor who buys a 17 -
year government bond and reinvests all of his coupons
in the same instrument.
The simplified explanation for this aberrant investing disaster was a dramatic rise
in interest rates during the period: Rates on long - term
government bonds went from 4 % at
year - end 1964 to more than 15 %
in 1981.
For instance, here is Germany's 5 -
year government bond yield which is clearly pricing
in much more demand ahead.
In addition, housing and the economy should get a lift from the plunge in 10 - year U.S. government bond yields to 3 %, and, if the economy needs it, a new round of quantitative easing from the Federal Reserv
In addition, housing and the economy should get a lift from the plunge
in 10 - year U.S. government bond yields to 3 %, and, if the economy needs it, a new round of quantitative easing from the Federal Reserv
in 10 -
year U.S.
government bond yields to 3 %, and, if the economy needs it, a new round of quantitative easing from the Federal Reserve.
Rates on
government bonds in Germany and Switzerland fell further into negative territory after Brexit, while yields on 10 -
year Treasuries dropped below 1.5 % and touched record lows.
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
Progress
in a few areas has been solid: slashing of bureaucratic red tape has led to a surge
in new private businesses; full liberalization of interest rates seems likely following the introduction of bank deposit insurance
in May; Rmb 2 trillion (US$ 325 billion) of local
government debt is being sensibly restructured into long - term
bonds; tighter environmental regulation and more stringent resource taxes have contributed to a surprising two -
year decline
in China's consumption of coal.
In March 2015, the China Financial Futures Exchange launched futures on the 10 -
year government bond.
Indeed, the downturn
in the US
government -
bond market at the end of 2016 and earlier this
year benefited many fixed income arbitrage managers who were able to take advantage of the price decline
in US Treasuries during those periods.
«Back
in 2007,
bond yields were 5 % on a 10 -
year [
government]
bond,» Kaufman says.
European
government bond and U.S. 10 -
year Treasury yields are trading at their highest levels
in more than two months and the U.S. 30 -
year Treasury
bond yield reached a high for the
year on Tuesday.
If you bought long - term
government bonds in 1940, forty
years later, your dollar was worth $ 0.37, and you weren't made whole until 1991!
We assumed that
in each period a 30 -
year bond is issued at prevailing interest rates (long - term
government bond plus 1 %) and that amount is invested for the next 30
years in a portfolio of large - cap stocks while paying off the
bond as an amortized loan (as if it were a mortgage).
The image below shows the ten worst
years for long - term
government bonds, and how stocks performed
in the same
year.
The Direxion 30 -
year Treasury Bull 3X ETF ($ TMF), an index that tracks the performance of long - term US
government T -
bonds, has been
in a long - term uptrend since February of 2011, but has been
in an intermediate - term downtrend (correction) off its highs since July of 2012.
The BOJ plans to remain active
in the 10 -
year sector and focus on keeping the rate of the 10 -
year Japanese
Government Bond at around zero.
The
government's 10 -
year bonds rose, pushing yields to their lowest level this
year, while the benchmark BUX stock index rallied the most
in six weeks.
the initial sale of U.S. debt obligations and new issues, offered and purchased directly from the U.S.
government at a face value set at auction; these securities are auctioned
in a single - priced, Dutch auction; auctions are held with the following frequencies: Treasury bills with one - month (30 day), three - month (90 day), and six - month (180 day) maturities are auctioned weekly; treasury notes with two - and five -
year maturities are auctioned monthly; Notes with three -
year maturities are auctioned
in February, May, August, and November; treasury
bonds with 10 -
year maturities are auctioned
in February, May, August, and November.
The
government's elevated gross borrowing requirements estimated at around 17 % of GDP per
year between 2017 and 2019 are mainly driven by sizeable maturing
government bonds —
in particular, local currency USD - indexed
bonds — on top of fiscal deficits averaging around 3.8 % of GDP.
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).
In fact, the 10 -
year Chinese
government bond yield fell following the major announcements (Graph B, right - hand panel).
The reason: a surge
in yields on US Ten
Year Government Treasury Bonds, which hit a four - year high of 2.86 per c
Year Government Treasury
Bonds, which hit a four -
year high of 2.86 per c
year high of 2.86 per cent.
In addition, sovereign wealth funds — which generally diversify their portfolios to include a small portion of alternate assets such as gold, private equity and real estate — are likely to raise their allocations following the low yield in government bonds over the last couple of year
In addition, sovereign wealth funds — which generally diversify their portfolios to include a small portion of alternate assets such as gold, private equity and real estate — are likely to raise their allocations following the low yield
in government bonds over the last couple of year
in government bonds over the last couple of
years.
In a country where the unemployment rate is at a 20 -
year low and industrial output is approaching historical highs, fueling inflation concerns, a 10 -
year government bond yield of 1.5 % is totally inappropriate and will naturally spur people to buy real estate.
China's benchmark 10 -
year government bond yield traded just shy of 4 percent
in early December, up almost 100 basis points over the course of 2017.
In recent
years, I can't recall one Investment Master recommending
government bonds as an investment.
Michael Hasenstab: As we look toward the end of the
year, we have to question whether the type of US
government bond yields we have today make sense given rising inflation and the resiliency we've seen
in the US economy.
«the probability that the investor holding stocks will double her capital every 10
years after inflation, quadruple every 20, combined with 100 % odd that she will outperform T - bills or
government bonds in 20
years, can hardly be called risky.
Foreigners held 574 billion yuan, or about $ 87 billion, of Chinese central
government bonds in November, official data showed, up 35 percent
year on
year.
To provide an example, the yield of the two -
year Chinese
government bond in yuan is around 3.35 %.
The resulting increase
in corporate
bond issuance has pushed up swap spreads, with the spread on US 10 -
year (bank /
government) swaps, for example, recently at its highest level for several
years (Graph 7).
12-10-2010 Resignation of Chairman 11-10-2010 Caledonia Mining Announces Third Quarter 2010 Results 10-21-2010 Caledonia Mining Announces the Commissioning of the No. 4 Shaft Project 08-26-2010 Caledonia Mining Announces the Completion of the Underground Installations on the No. 4 Shaft Project 08-18-2010 Caledonia Option Exercise Prices Reduction Becomes Effective 08-12-2010 Caledonia Mining 2010 Second Quarter and Half
Year Results and Management Conference Call 06-14-2010 Caledonia Commissions the First Standby Generator at Blanket Gold Mine
in Zimbabwe 05-14-2010 Caledonia Mining First Quarter 2010 Results 05-06-2010 Caledonia Installing a Standby Generator at Blanket Gold Mine
in Zimbabwe 03-31-2010 Caledonia Mining 2009 Fourth Quarter and Annual Results and Management Conference Call 02-12-2010
Government of Zimbabwe sets out Regulations for Indigenisation 01-29-2010 Reserve Bank of Zimbabwe Defaults on
Bond Repayment to Caledonia Mining and update on timeline for completion of No. 4 Shaft Expansion
Open Europe, a Brussels - based think tank, estimates that through
government bond purchases and liquidity provisions to banks, the ECB's exposure to Greece, Portugal, Ireland, Italy, and Spain has reached 705 billion euros, up from 444 billion euros
in early summer - a 50 percent increase
in six months (their note was published prior to the December 21 three -
year LTRO, which likely further boosted lower quality collateral).
For three - straight
years — between 2014 and 2016 — the greenback surged higher as the Fed ended «QE3,» the stimulus program that had the U.S. central bank buying as much as $ 85 billion worth of
government bonds per month, and did away with the zero - interest - rate policy that was
in place since the financial crisis.
The ECB's Draghi dropped more hints about how the central bank could support struggling countries, suggesting it was free to buy
government bonds maturing
in three
years or less.
In France,
government bonds of up to three
years carry a negative yield.
Ever since the ECB has begun to implement its assorted money printing programs
in recent
years — lately culminating
in an outright QE program involving
government bonds, agency
bonds, ABS and covered
bonds — bank reserves and the euro area money supply have soared.