Since days investors buy more German government bonds – for fear of turbulence in the case of a British EU exit. The papers are considered a safe haven.
The interest rates on the German bond market fall deeper and deeper. On Tuesday morning, the yield on the market especially noticed Bunds reached a new record low with ten-year maturity.
Experts call the two main reasons for the falling market interest rates. First, they refer to the last significantly reduced interest rate expectations on the US Federal Reserve. After weak jobs data, Fed chief Janet Yellen
had expressed at the beginning of the week reserved for monetary policy. "Self-reinforcing downward spiral"
On the other hand refer experts in the monetary policy of the European Central Bank (ECB). This is extremely easy not only for the foreseeable future. The high purchases of government bonds for increasing interest pressure care. Bond professionals Commerzbank speak of a "self-reinforcing downward spiral".
Another reason for the strong demand for government bonds is the nervous mood on the financial markets before the vote on leaving the EU from Britain. The fear drives investors for days in increasingly safe investment havens such as German government bonds. If it comes to the Proposed referendum on United Kingdom membership of the European Union, the future of the European Union is at stake. Experts predict a global market tremors. Even a recession in the UK and in major trading partners worry some economists.
insurers and pension funds as the main customer
Already one week before the average interest rate of all Bunds fell into negative territory. Bunds were for decades the Germans as an investment very popular. They were considered safe and brought a neat, overlying the passbook return. But those days are now over. Should we all now have to buy government bonds? Not really. For who invests his money, also expects a good return. Fallen contrast yields below zero, savers should keep their money in cash rather. Or they look for alternatives that still provide a reasonable return at an acceptable risk.
The main customers for Bunds are insurers and pension funds. They are required by law to invest a portion of their savings in Federal securities. By the weak performance of German government bonds also fall the guaranteed interest rates on life and annuity continues. Because the insurance companies with the Bonds hardly earn any more money, they have problems to meet their payment obligations
In the video. The US must tremble: this country seeks to tip the global economy
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