Fixed Income Stay updated with Business News, Pakistan news, Current world news and latest world news with Business Recorder.. http://www.brecorder.com/markets/fixed-income.html Thu, 29 Jan 2015 22:15:40 +0000 SRA Framework 2.0 en-gb Ivory Coast aims to borrow over $1bn http://www.brecorder.com/markets/fixed-income/middle-east-a-africa/220881-ivory-coast-aims-to-borrow-over-$1bn.html http://www.brecorder.com/markets/fixed-income/middle-east-a-africa/220881-ivory-coast-aims-to-borrow-over-$1bn.html imageABIDJAN: Ivory Coast will next month tap international lending markets for a second time, aiming to raise more than $1 billion in a placement of bonds, the country's finance minister said Thursday.

"The objective is to complete the operation by the end of February 2015 so that the money will be available in March," Daniel Kablan Duncan told a news conference.

Ivory Coast successfully raised $750 million in a eurobond placement last July in its first foray into the international debt markets.

The 10-year bonds were placed with a yield of 5.625 percent, just a month after its international partners wrote off $6.5 billion in development aid.

Duncan did not specify what the next tranche of borrowed money would be used for, but since the country's political crisis ended in 2011 with the installing of Alassane Ouattara as president, the country has stepped up infrastructure spending.

That has helped Ivory Coast achieve growth rates of between 8 and 10 percent the past three years.

Copyright AFP (Agence France-Presse), 2015

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s.rs96@yahoo.com (Shoaib-ur-Rehman Siddiqui) Middle East & Africa Thu, 29 Jan 2015 20:55:03 +0000
German yields dip on Fed rate hike doubts, Greek worries http://www.brecorder.com/markets/fixed-income/europe/220677-german-yields-dip-on-fed-rate-hike-doubts-greek-worries.html http://www.brecorder.com/markets/fixed-income/europe/220677-german-yields-dip-on-fed-rate-hike-doubts-greek-worries.html imageLONDON: German bond yields fell on Thursday as worries over Greece's new anti-bailout government buoyed demand for top-rated assets from investors who were also starting to think the U.S. Federal Reserve could hold back any interest rate rise.

Athens looked to set to endure a fourth day of market jitters since Sunday's election with its newly-instated government at loggerheads with international creditors as it begins to roll back austerity measures.

Strained relationships in the euro area will likely be one of the international concerns that the U.S. Federal Reserve said could influence future rate decisions at Wednesday's policy statement.

Its nod to these "developments", during a statement that otherwise praised the solid pace of recovery in the world's largest economy, prompted some to push back expectations for the Fed's first rate hike since 2006 until the autumn.

"Overall the message could be regarded as marginally dovish, seemingly cooling enthusiasm for a June hike," said RBS in a note.

U.S. Treasury yields dipped in the wake of the meeting, with 30-year yields touching record lows.

When European markets opened, the euro zone benchmark German bonds followed suit, with 10-year and 30-year yields falling 2 bps to 0.34 percent and 0.96 percent, respectively.

But lower-rated bonds stuttered, with Portugal, Italy and Spain's 10-year yields up between 1-2 bps at 2.40, 1.62 and 1.46 percent, respectively.

While demand for these bonds remains supported by the ECB's pledge to start buying sovereign bonds from March, they have given up around 75 percent of the rally that followed the announcement of that scheme last week.

Greece, which investors fear could be on course for another default, has inspired this reversal of risk sentiment. Greek 10-year yields hit a 1-1/2-year high of 11.07 percent, up 26 bps on the day. The three-year equivalents were even higher at levels not seen since the 2012 debt restructuring.

Prime Minister Alexis Tsipras' vow to stick to anti-austerity pledges has led to fears he will scrap the country's bailout deal and renegotiate Greece's massive debts despite warnings from its main lenders, the European Union and International Monetary Fund.

ECB board member Benoit Coeure, who has already said the bank would not take part in any debt cut for Greece, said on Thursday that it must continue to abide by the rules of the game.

Tsipras has also unsettled European partners by criticising an EU statement that warned Moscow it faced new sanctions over its role in Ukraine.

Copyright Reuters, 2015

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imad_kueconomist@yahoo.com (Imaduddin) Europe Thu, 29 Jan 2015 12:53:21 +0000
UK 10-year government bond yield touches new record low http://www.brecorder.com/markets/fixed-income/europe/220635-uk-10-year-government-bond-yield-touches-new-record-low.html http://www.brecorder.com/markets/fixed-income/europe/220635-uk-10-year-government-bond-yield-touches-new-record-low.html imageLONDON: Ten-year British government bond yields fell to a record low on Thursday, driven down by the U.S. Federal Reserve underlining it will be "patient" in raising interest rates, as well as by uncertainty about the new Greek government's reforms.

The 10-year gilt yield sank below 1.4 percent for the first time, breaking a record which had held since the depths of the euro zone debt crisis in July 2012, and reached a trough of 1.396 percent at 1113 GMT according to Reuters data.

At 1125 GMT it was down 5 basis points on the day at 1.41 percent.

"In the morning gilt prices caught up with the price action overnight with Treasuries after the FOMC," said Vatsala Datta, strategist at RBC, referring to Wednesday's Fed statement.

Long-term U.S. bond yields slid late on Wednesday as some investors focused on the Fed's reference to international developments and weak inflation, which they judged might cause it to delay tightening policy.

And safe-haven German Bunds rallied on Thursday as worries over Greece's new anti-bailout government buoyed demand for top-rated assets.

Datta also said some British government bond investors had been waiting until Wednesday's syndication of the 2058 inflation-linked gilt was out of the way before moving back into the gilt market. A relative lack of gilt issuance in February should help support prices in coming weeks.

Twenty- and 30-year gilt yields also touched new record lows of 1.921 percent and 2.102 percent respectively.

Copyright Reuters, 2015

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imad_kueconomist@yahoo.com (Imaduddin) Europe Thu, 29 Jan 2015 11:57:34 +0000
Greek 5-year yields hit record high on concerns over anti-bailout cabinet http://www.brecorder.com/markets/fixed-income/europe/220467-greek-5-year-yields-hit-record-high-on-concerns-over-anti-bailout-cabinet.html http://www.brecorder.com/markets/fixed-income/europe/220467-greek-5-year-yields-hit-record-high-on-concerns-over-anti-bailout-cabinet.html imageLONDON: Greek five-year yields jumped to record highs on Wednesday as investor concerns that the new anti-bailout government in Athens was squaring up for a clash with international creditors rocked the country's markets.

Prime Minister Alexis Tsipras chaired his first cabinet meeting on Wednesday after appointing a team of anti-austerity ministers and halting privatisation of Greece's biggest port, agreed under its 240-billion-euro international bailout.

Markets took this as another signal that he intends to stick to election pledges to scrap the bailout, abandon austerity and renegotiate Greek's debt pile despite warnings from European Union officials and the International Monetary Fund.

Greek five-year yields jumped 117 basis points to 13.12 percent, an all-time high, while three-year yields were 189 bps higher at 16.09 percent, close to record highs and 10-year yields were up 54 bps at 10.33 percent.

Shorter-dated yields extended their gap over longer-term ones, reflecting increasing investor concern that they may not get all their money back.

"It's a continuation of what we've seen in the past few days. Now Tsipras has announced his new cabinet and his new finance minister seems to be a rough guy from the very far left of the political spectrum," said Felix Herrmann, a market strategist at DZ Bank.

"This is raising fears that there's a clash coming up between Athens and its lenders. The fact that he joined a coalition with the far right is not helping either."

Other peripheral euro zone bond yields also rose, with Portuguese 10-year yields 10 bps higher at 2.31 percent while Spanish and Italian equivalents were 6 bps up at 1.45 percent and 1.59 percent respectively. They all pulled further away from record lows hit last week after the European Central Bank announced its quantitative easing programme.

TEMPORARY SELLOFF

Analysts said any backup in peripheral euro zone bond yields except Greece provided a buying opportunity before the European Central Bank starts buying sovereign bonds in March.

"We see temporary (yield spread) re-widening corrections as an opportunity to position for tighter spreads going into QE," BNP Paribas strategists said in a note.

German yields, the benchmark for euro zone borrowing costs, were up 2 bps at 0.39 percent after a survey showed consumer confidence was growing in Europe's biggest economy and before a sale of 31-year bonds in Berlin.

Germany will sell up to 2 billion euros of 31-year bonds later in the day, which falls just outside the ECB's surprising decision to include 30-year paper in its shopping list of sovereign bonds. Yields on 30-year euro zone bonds hit record lows across the credit spectrum, with those on German paper tumbling just below 1 percent as investors seeking to maximise returns moved up the yield curve.

Longer-dated paper lagged the rally and some analysts said it looked relatively cheaper to the 30-year paper and may lure investors such as pension or insurance funds looking for a bit of a yield pick-up.

Copyright Reuters, 2015

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imad_kueconomist@yahoo.com (Imaduddin) Europe Wed, 28 Jan 2015 12:08:50 +0000
Ten-year gilt prices rally on downbeat global economic data http://www.brecorder.com/markets/fixed-income/europe/220186-ten-year-gilt-prices-rally-on-downbeat-global-economic-data.html http://www.brecorder.com/markets/fixed-income/europe/220186-ten-year-gilt-prices-rally-on-downbeat-global-economic-data.html imageLONDON: Ten-year gilt prices rose strongly on Tuesday following some downbeat economic data, particularly from the United States, that prompted a rally in safe-haven government bonds.

By 1620 GMT the 10-year gilt yield was down around 3.5 basis points on the day at 1.48 percent, as the bond outperformed equivalent German debt but trailed behind surging U.S. Treasuries.

Gilts wavered following weaker-than-expected British economic growth data for the fourth quarter, but rallied strongly following after a gauge of U.S. business investment plans unexpectedly fell.

The yield spread between 10-year gilts and the equivalent German Bund tightened by more than a basis points on the day to 110 basis points.

On Wednesday, Britain's Debt Management Office is widely expected to hold a sale via syndication of the 0.125 percent 2058 index-linked gilt.

ADM Investor Services strategist Marc Ostwald said in a note to clients that pension funds would by forced to buy the bonds because of duration index extensions, even though buying them could be seen as a form of "insanity" with such negative real yields.

Copyright Reuters, 2015

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imad_kueconomist@yahoo.com (Imaduddin) Europe Tue, 27 Jan 2015 16:44:59 +0000
Italy to offer up to 8.25bn euros of CCTEU, BTP at auction http://www.brecorder.com/markets/fixed-income/europe/219924-italy-to-offer-up-to-825bn-euros-of-ccteu-btp-at-auction.html http://www.brecorder.com/markets/fixed-income/europe/219924-italy-to-offer-up-to-825bn-euros-of-ccteu-btp-at-auction.html imageROME: Italy's Treasury said on Monday it would issue up to 8.25 billion euros ($9.32 billion) of floating-rate notes linked to euro-zone inflation (CCTEU), and fixed-rate bonds (BTP) at its regular end-month auction on Jan. 29. The Treasury said in a statement it would offer:

Between 1.25 billion euros and 1.75 billion euros of a 9th tranche CCTEU maturing on Dec. 15, 2020.

Between 2.5 billion euros and 3 billion euros of a 5th tranche BTP with a 1.05 percent coupon, maturing on Dec. 1, 2019.

Between 3 billion euros and 3.5 billion euros of an 11th tranche BTP with a 2.5 percent coupon, maturing on Dec. 1, 2024.

Copyright Reuters, 2015

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s.rs96@yahoo.com (Shoaib-ur-Rehman Siddiqui) Europe Mon, 26 Jan 2015 20:47:56 +0000
US yields fall as European debt yields drop to record lows http://www.brecorder.com/markets/fixed-income/americas/219428-us-yields-fall-as-european-debt-yields-drop-to-record-lows.html http://www.brecorder.com/markets/fixed-income/americas/219428-us-yields-fall-as-european-debt-yields-drop-to-record-lows.html imageNEW YORK: US Treasury yields fell on Friday as European government bond yields fell to record lows, a day after the European Central Bank said it would launch new stimulus in an effort to boost sagging regional growth and stave off deflation.

The ECB said it would buy 60 billion euros ($67 billion) of assets a month from March, focusing mainly on sovereign bonds. Bond purchases will cover maturities of up to 30 years - longer than many in the market had expected.

"We're trading higher in sympathy with what's going on in Europe," said Ian Lyngen, senior government bond strategist at CRT in Stamford, Connecticut. "The QE program is buying further out the curve than initially anticipated."

Long-dated bonds led the US rally and the yield curve flattened as investors reached for higher yields. Treasuries are attractive as they offer significantly higher yields than comparable European debt.

Benchmark 10-year notes gained 15/32 in price to yield 1.82 percent, far higher than comparable German debt yields that fell to record lows of 0.312 percent on Friday.

Thirty-year bonds gained 1-7/32 in price to yield 2.38 percent, down from 2.47 percent late on Thursday. The yield curve between five-year notes and 30-year bonds flattened to 106.6 basis points, from 107.6 basis points late on Thursday.

Manufacturing and housing data is due later on Friday.

The next major focus for the market is the Federal Reserve's Jan. 28 policy announcement at the completion of a two-day meeting.

Copyright Reuters, 2015

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s.rs96@yahoo.com (Shoaib-ur-Rehman Siddiqui) Americas Fri, 23 Jan 2015 20:49:07 +0000
Italy to issue 7bn euros of BOTs at end-month auction http://www.brecorder.com/markets/fixed-income/europe/219382-italy-to-issue-7bn-euros-of-bots-at-end-month-auction.html http://www.brecorder.com/markets/fixed-income/europe/219382-italy-to-issue-7bn-euros-of-bots-at-end-month-auction.html imageROME: The Italian Treasury said on Friday it would offer seven billion euros of first tranche, 6-month Treasury bills (BOTs) at its regular end-month auction on Jan. 28.

The BOTs will mature on July 31, 2015.

Copyright Reuters, 2015

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s.rs96@yahoo.com (Shoaib-ur-Rehman Siddiqui) Europe Fri, 23 Jan 2015 19:48:26 +0000
Portugal 2014 public deficit falls 20pc, beats target http://www.brecorder.com/markets/fixed-income/europe/219365-portugal-2014-public-deficit-falls-20pc-beats-target.html http://www.brecorder.com/markets/fixed-income/europe/219365-portugal-2014-public-deficit-falls-20pc-beats-target.html imageLISBON: Portugal's public deficit shrank by 20 percent to 7.07 billion euros ($8 billion) last year as spending fell and tax revenues hit a record high, to beat the government's deficit estimate by 655 million euros, the finance ministry said on Friday.

The primary public balance, which excludes debt interest payments, swung to a surplus of 1.03 billion euros from a deficit of 882 million euros a year earlier, the ministry said.

Tax revenues rose 2.3 percent to a record 37.1 billion euros.

The government said it cut spending by 1.2 billion euros last year.

Portugal ended its 2011 bailout from the European Union and the International Monetary Fund in May, but is still working to bring down its debts and deficit as a percentage of gross domestic product.

The budget deficit target for last year was 4 percent of GDP excluding one-off loans to public transport companies.

The government has pledged to keep a tight budget and cut the deficit below 3 percent this year.

Copyright Reuters, 2015

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s.rs96@yahoo.com (Shoaib-ur-Rehman Siddiqui) Europe Fri, 23 Jan 2015 19:30:21 +0000
US to sell fewest 2-year notes in nearly 7 years http://www.brecorder.com/markets/fixed-income/americas/219070-us-to-sell-fewest-2-year-notes-in-nearly-7-years.html http://www.brecorder.com/markets/fixed-income/americas/219070-us-to-sell-fewest-2-year-notes-in-nearly-7-years.html imageNEW YORK: The US Treasury Department said on Thursday it will, as expected, sell $26 billion in two-year notes next Tuesday, which will be the smallest offering of this maturity since February 2008.

The US government's finance arm has reduced the auction sizes of two- and three-year notes for three straight months due to reduced short-term borrowing needs.

After the two-year note sale, the Treasury will sell $35 billion in five-year debt on Wednesday and $29 billion in seven-year securities on Thursday.

On the open market, the yield on two-year Treasuries last traded at 0.511 percent, up nearly 1 basis point from late on Wednesday.

Copyright Reuters, 2015

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s.rs96@yahoo.com (Shoaib-ur-Rehman Siddiqui) Americas Thu, 22 Jan 2015 20:22:39 +0000