Rampant market fear clarifies global divide

October 15, 2014

A slump in 10-year U.S. Treasury yields and the evaporation of this year’s stock gains augur poorly for the Fed’s bond-buying exit. Yet the domestic economy has been improving. Slowing growth elsewhere presents the bigger worry. America’s central bank can’t do much about that.

U.S. debt capers may expose “risk-free” fallacy

July 26, 2011

Exposing "risk-free" for the illusion that it is would correct another major flaw in the markets.

European bond buyers: often wrong, never in doubt

By Edward Hadas
November 14, 2011

Bond market investors are a fickle lot. They were too complacent for years and now they may be too demanding – though their reformist zeal is welcomed by most. As a result, politicians and the ECB, which might have anticipated the risks, have more complex problems to deal with.

Investors start to notice Germany is in euro zone

By Edward Hadas
November 28, 2011

Neither an undersubscribed Bund auction nor yields crossing the 2 percent threshold is a sign of total panic. Still, Germany is looking less like a safe haven. That makes sense - it would struggle if the euro came unstuck. All the more reason for EU leaders to stop squabbling.

Worst might be over in euro debt crisis

By Edward Hadas
January 24, 2012

Greece could still have a hard default and Portugal remains worse than a question mark. But the main reason there’s a regional crisis is that investors think there is one. Now they could be changing their minds, thanks to money from the ECB, plus some fiscal and political resolve.

Italy’s revival brings little joy to fund managers

February 8, 2012

Many bond investors have missed the best trade of 2012 so far. Italian 10-year government debt gained 8 pct in January while many managers were wary. Rather than chase prices higher, those who missed the boat may find more value in other corners of the euro zone periphery.

Say hello to 100 years of financial repression

By Edward Hadas
March 15, 2012

The UK might issue ultra-long bonds. The yield would be ultra-low, courtesy of the Bank of England’s monetisation policy. Buyers would be ultra-foolish, but they may come – that’s how financial repression works. This looks like a symbolic victory for the government over savers.

Liquidity fears trump sense in Asia’s markets

June 6, 2012

Investors fretting about a euro breakup are moving into the wrong Asian markets. They are favouring liquid Australian and South Korean bonds. But it is hot money that could burn investors if the story changes. Higher-yield bonds from say, the Philippines, might be a better bet.

European banks may face harsher tests from market

July 23, 2010

Europe's bank tests were not stressful enough. Only seven of the 91 lenders participating in the exercise administered by the continent's regulators will need extra capital to see them through a severe economic shock. The exams were undermined by failing to imagine a sovereign default. Forcing banks to disclose their government bond portfolios, however, gives investors the power to conduct their own more rigorous assessments.

Europe tries to skirt both chaos and complacency

June 13, 2013

Governments struggle to make tough choices when markets are forgiving. Rising yields on risk-free debt, and the German constitutional court’s unpicking of the ECB’s bond buying, herald a tougher ride for peripheral bond markets, and less chance for governments to rest easy.