Friday, February 23

The German bond returns to positive rates three years later

It has taken three years for the German bund to return to positive rates. This Wednesday, the reference to ten years has started the session with rises and is around 0.008 (144 percent more than yesterday).

The german bond, seen as the safest asset, went negative in May 2019 and reached a low of -0.9 percent in March 2020, coinciding with the full outbreak of the coronavirus pandemic.

But the truth is that the yield on European sovereign debt has been rising for several weeks in the face of inflation that is losing its transitory overtones, which makes the possibility of central banks speeding up the withdrawal of stimuli sound loud.

Precisely, investors will be attentive to the meeting of the United States Federal Reserve next week, which could undertake the first rate hike, which would be a surprise, since it was still expected that the North American central bank would make that decision. in the second quarter of the year.

Rise in yields

The rise in yields has spread to the rest of sovereign debt. In Spain, the ten-year bond reaches a yield of 0.70 percent; in Portugal, the rate is 0.607 percent; in Italy, 1.348 percent, and in Greece, 1.606 percent.

As for the debt of the The United States has also climbed in recent sessions, and on Wednesday the ten-year bond (known as T-Note) close to 1.9 percent, marking new annual highs.

For its part, the two-year bond, which is considered especially sensitive to changes in monetary policy expectations, has reached 1 percent for the first time since February 2020. The expectation is that the Fed will raise at least four times interest rates this year.