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  #371  
Old 07-22-2019, 10:00 AM
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ITALY
GREECE

https://www.wsj.com/articles/italian...ds-11563380740

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Italian, Greek Bonds Rally as Hunt for Yield Expands
Some investors bought the securities because they are unwilling to buy safer bonds at increasingly negative yields

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Investors are buying bonds from once-avoided European countries, spurred by expectations that easy-money policies from central banks will continue to fuel demand for debt.

The yield on Italy's 10-year government bond, which falls as bond prices rise, has dropped more than 1 percentage point since the end of May, while the yield on Greek 10-year debt has fallen almost as fast. The moves have outpaced recent declines in German and U.S. government bonds, which are perceived as safer.

Investors' hunt for yield has been evident at government debt auctions. Greece sold 2.5 billion euros ($2.8 billion) of seven-year notes Tuesday, attracting more than four times that amount in bids from investors. That compares with an offering in Germany last week, where investors submitted only slightly more bids than the 3.15 billion euros of negative-yielding 10-year debt for sale.

Some investors have bought the securities because they are unwilling to buy safer bonds at increasingly negative yields, while others have snapped them up because they are part of a diminishing supply of bonds from European governments that still pay investors to hold them. Negative-yielding bonds cost investors more to buy than the combined total of interest and principal payments they receive in return. That means investors are effectively paying borrowers to hold their money.

European Central Bank President Mario Draghi surprised some investors last month when he signaled that the central bank was prepared to lower interest rates from their current level of negative 0.4% and resume purchasing bonds after halting that policy at the end of last year. Federal Reserve Chairman Jerome Powell signaled the Fed will lower rates at its meeting later this month.

"The European situation tends to go in long cycles," said Robert Tipp, chief strategist at PGIM Fixed Income, which owns more Italian and Greek debt than its benchmarks. "Markets have been very enthused" by Mr. Draghi's signals of further support, Mr. Tipp said.

Investors have shifted into the riskier bonds as expectations for interest-rate cuts by the ECB and Fed have pushed down the yield on German 10-year debt to records and the 10-year Treasury yield to multiyear lows.

The yield on the benchmark 10-year Treasury note settled Wednesday at 2.059%, down from 2.124% Tuesday. The yield on 10-year Greek debt was 2.218% and the yield on 10-year Italian debt was 1.583%.

Yields on sovereign debt in Germany, France, the Netherlands and several other countries have fallen to records below zero. There are about $11.4 trillion of bonds with negative yields, which account for 23% of outstanding debt, according to Bank of America Merrill Lynch.

That search for yield has led investors from overseas to add to their Treasury holdings. Foreign investors increased stakes in U.S. government debt by 1.6% in May, the most since 2011.

The election of a new government in Greece has supported demand for its debt, investors say. Italian yields rose earlier in the year as some investors became concerned that the government's plans to run large budget deficits to spur activity in a slow-growing economy could lead the country to exit from the European Union. As officials have scaled back their plans, those worries have largely abated, investors said.


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  #372  
Old 09-12-2019, 12:05 PM
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The beatings will continue until morale improves.

https://www.marketwatch.com/story/ec...omy-2019-09-12
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  #373  
Old 09-12-2019, 12:36 PM
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Just raise rates to 5% and let the recession works its way through. Oh well, prepare for the pain.
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  #374  
Old 09-12-2019, 12:50 PM
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This stuff is driving me crazy
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