THE purchases were imposed on the debt market over the last five sessions which have brought down the profitability of the main benchmarks of the sovereign debt market on both sides of the Atlantic. The ten-year American bond is at 3.75% while the German bond is at 2.1%. In fact, only the sovereign debts of the main Pacific benchmarks are recording yield increases.
He The Japanese bond marks a yield of 0.83% while Chinese ten-year securities recorded an increase in profitability of 11 basis points to 2.1% in the same week in which the country’s authorities presented their new package of fiscal incentives and stimuli to revive its financial market.
On the European market, the current risk premium between Spanish and French debtwhich was reduced to zero with a profitability of ten-year securities in both cases at 2.92%. And this has not been seen since 2007 on the secondary market. After the result of the last elections and until the appointment of French Prime Minister Michle Barnier, the French debt market reflects the political instability of the country and the absence of a parliamentary majority which, in practice, can represent a political blockade. “These elements lead us to remain cautious on French debt and to favor Spanish debt in the coming months,” commented François Rimeu, strategist at Crédit Mutuel Management.
Furthermore, debts with shorter maturities are gradually being aligned with ten-year sovereign debts. With the latest interest rate adjustments from the US Federal Reserve and the European Central Bank, and those expected in the coming months, the debt curves tend to normalize. That is, the market once again sees long-term risk as greater than more immediate risk (as tends to be common in a market in which uncertainty or the risk of recession looms on the horizon). unknown).
In this way, the gap between the two-year bond and public securities with a maturity of a decade turns in favor of the latter in the case of United States, Germany, British public debtFrench and Spanish among many other references.
