Isabel Blanco
26.08.2014 – 20:57
New record low, but not negative rates achieved market views.
Investors ultimately not paid for lending money to the Spanish state, as might have happened in the auction held yesterday, but the Treasury managed short-term financing practically free. The agency responsible for issuing the Spanish public debt disbursed only an average yield of 0.032% by placing 3-month bills and 0.107% for the role to 9 months. With these yields, managed capturing 3,500 million euros. 1,106 million achieved by 3 months, you will pay about 354,000 euros
It was the first auction after that for the first time, the Spanish reference to short-term rates has contributed to negative. Excess liquidity and renewed expectations on another unprecedented action by the European Central Bank (ECB) after the intervention of its president, Mario Draghi, at the Jackson Hole meeting, have fueled purchases of debt and that is felt both in the primary market (auctions) and secondary (where securities are traded after being issued).
In the first case, the Treasury managed yesterday a new minimum funding . Yesterday, the anticipation was even higher, since the 3-month bills were one of the assets auctioned the body and for the first time there was a real possibility of negative rates were to lie. Finally, the yield fell from 0.127% previously and stood on the edge of negative territory … will be next? “Between 0.03% and -0.03% there is much difference.’m Not ruling it out, but the important thing is that they are almost zero rates,” says José
So far the only Spanish paper that has already priced in negative rates, ie which has been exchanged at prices with which the investor loses money in the case of securities to maturity preserve -because pay more than the state-will return. But many investors buy just waiting to allow the interest to follow the low-and elevational prices. Currently, in the secondary market yields continue to decline.
Yesterday profitability Spanish 10-year bonds hit a fresh record low 2.17% , while the American trading at 2.37%. There was such a difference since 2007 Meanwhile, German 10-year marked another minimum at 0.939% (stood at all the negative short-term debt, up to 3 years). At these levels, the gap between Spain and Germany was reduced to near its lowest point. The risk premium closed at 123 basis points, after falling 8 points. “The only explanation for this very violent motion in debt is that the market is discounting a QE of the ECB,” says Pablo Gonzalez, CEO of Abacus Capital. “Behind this good behavior bond markets are expectations that the ECB adopt further monetary stimulus (QE) pulse at the loss of the European economy in an environment of rising deflationary pressures (which this week will confirm with the inflation data on Friday will be known) “share in Renta 4.
Ignacio Cantos, investment director Atl Capital, explains that responds to the high liquidity in market, not forgetting low inflation in the euro zone following. The expert suggests that what is striking is not only because the interest in placing the 3-month bills has fallen to almost zero, but also the Spanish bonus round to 2 years and those levels, so that the Treasury could finance almost free more than one quarter. The yield of 2-year debt stood at 0.15%.
No loss for the particular
The inverter is increasingly fewer alternatives to scratch where some performance. But the Treasury, aware that individuals may even lose money if you go to any auction, has changed in the short term remaining this year regulations for emissions. Requests made without specifying a minimum interest will be void if the average yield of an auction of letters is negative, otherwise the owners would be assigned to the average return.
ADVERTISING
No comments:
Post a Comment