The yield curve is a plot of
the yield on bonds with the same credit quality across different maturities (the link above provides an interesting interactive model of the «living» yield curve).
By looking at
the yields on bonds with different maturities you can get a picture of how much extra you can earn.
Not exact matches
It is not as if Ontario is having problem finding takers for its debt and
yields on the province's
bonds are competitive
with other provinces.
Bond yields, which move opposite price, fell
on the day,
with the Fed - sensitive 2 - year
yield dipping to 2.49 percent.
Sure enough, the
yield on a Canadian 10 - year
bond has risen in tandem
with its U.S. counterpart since the start of the year, even as Poloz has signaled caution ahead.
While investors will have to find stocks
with higher
yields, pay more for them and take
on more risk in
bonds, the biggest change in a permanently low - rate world is that people will need to set aside more of every paycheque if they want to keep the same goal for retirement income.
With the Fed actively buying securities
on the open market, the additional demand means
bond issuers can promise lower
yields and still attract investment.
Although there may not be a
bond bubble,
with investors starved for
yield, Gundlach predicts a potential bubble could form in credit risk as investors increase their leverage
on riskier debt securities like junk
bonds and emerging market debt.
Concerns over the French presidential election seemed to have eased slightly
on Monday
with the
yields on the 10 - year French
bond falling.
With bond yields globally in the dumps, Singapore's wealth fund GIC is looking at unconventional sources for fixed income returns, Liew Tzu Mi, GIC's chief investment officer for fixed income, said
on Thursday.
Dip in share prices and
bond yields, along
with the upcoming election has had an impact
on the state of the global economy, causing a setback in business travel growth.
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 uncertainty around the globe — including decrease in share prices and
bond yields, along
with the upcoming election — has had an impact
on growth in the business travel industry.
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.
The projected benefit payments are matched
with the
yields on these
bonds to determine an appropriate discount rate for the plan.
Treasury
yields edge lower
on Thursday,
with the 10 - year government
bond hanging around its lowest level in about seven weeks
The
yield on the U.S. 10 year Treasury
bond recently hit 9 - month highs and the 2s10s spread widened
on news of the Bank of Japan trimming its long - dated
bond buying program and questions around China's ongoing purchase of U.S. Treasuries (USTs)
with its foreign - exchange reserves.
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.
During times of recession the economy is stimulated
with low interest rates and once they get low enough, the
yield on bonds and other fixed investments becomes so unattractive that money starts to flow into equities.
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.
For the first time ever, Switzerland's entire stock of
bonds has fallen below zero,
with the 50 - year
yield plummeting to negative 0.03 percent
on July 5.
Bond yields rose while stocks fell
on the ECB news, while the Great British Pound stood out
with a strong performance, rising above 1.40 against the USD for the first time this month after a reported «breakthrough»
on the Brexit talks regarding the transition
with the EU.
We trade all fixed income assets,
with a focus
on more illiquid situations, from high
yield, distressed and investment grade
bonds and convertible
bonds to public and private corporate securities and leveraged loans.
«Focus
on securities
with shorter durations —
bonds with maturities in the five - year range and stocks paying dividends that offer 3 % — 4 %
yields.
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.
Furthermore, we would expect any rises in global
bond yields to be at least partly imported into Canada —
with possible implications for the Canadian dollar — and
with an uncertain net effect
on our economy.
«We're very happy
with an 18 percent which is achieved in a less volatile, pretty conservative manner,» said Carlson, noting that the firm focuses
on short - term, high -
yield bonds.
With my personal investment return goal of 3X the risk - free rate of return (10 - year
bond yield), anything above 6 % looks attractive, depending
on risk.
China's
bond yields climbed,
with the benchmark 10 - year
yield rising as high as 3.346 percent
on Friday from 3.233 percent
on Thursday.
Yields on the iShares S&P TSX 60 (XIU - TO) are around 2.25 % and
on the iShares DEX Universe
Bond Index ETF of mid-term
bonds is around 3.8 %
with -LSB-...]
A rise in the US 10 - year
yield to 2.998 % (4 - year high) was dollar supportive, and rise in global
bond yields also weighed
on gold
with the German Bund (0.603 % - 0.639 %), UK Gilt (1.49 % - 1.53 %) reaching 1 - month highs.
Monti, however, was critical of German and other insistence
on austerity and surrender of control as the price for assistance to countries struggling
with unsustainable
bond yields.
One important concept to understand is
yield, which is the annual income
on a
bond, based
on its market price; it's sometimes used interchangeably
with «interest rates.»
(Eco-groups will supplement
with what tools of persuasion they have as well; just don't rely
on them for wisdom
on bond yields.)
Japanese shares hit a two - month closing high
on Tuesday
with financials leading gains after U.S.
bond yields spiked to four - year highs and as investors remained optimistic about upcoming earnings.
A ferocious sell - off
on Wall Street
on Friday -
with stocks tumbling and
bond yields rising after the January U.S. jobs report suggested higher inflation ahead - served as a blunt reminder of the challenges Powell's Fed will face.
Tuesday's
bond activity was relatively quiet,
with the
yield on the benchmark 10 - year note rising to 2.635 percent after a volatile Monday showed the complicated and sometimes contradictory forces at work.
Persistently low official inflation rates in recent years depressed
bond yields along
with risk premiums
on all financial assets.
The High
Yield Bond Fund is a concentrated portfolio made up of liquid securities, focused
on high quality non-investment grade
bonds with strong cash flows.
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.
However, the reaction of the
bond market is another story altogether,
with yields on 10 - year Treasuries recently returning to about where they were when this year began.
How could one argue otherwise
on the
bond side
with investment grade
bonds yielding only 1.75 %?
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...
If stocks provide a better return
with better liquidity and
bonds provide a similar
yield with better liquidity (and collateral), why take
on the illiquidity at all?»
The first thing they watch when doing so is how high or low interest rates
on treasury
bonds with different maturities are, which is also referred to as the
yield curve.
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.
Floating - rate loans have
yields and volatility similar to high -
yield corporate
bonds,
with one major difference: As their name indicates, their interest rates «float,» adjusting periodically based
on a benchmark rate, typically the London Interbank Offered Rate (LIBOR).
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).
For example, GECC's January 8, 2020 maturing, 5.50 % coupon
bond (CUSIP: 36962G4J0)
with a 3.443 %
yield - to - maturity and an A1 rating by Moody's is,
on a standalone basis, actually a Baa1
bond.