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Market Extra: More good news for Europe? Flood of subzero bonds is abating

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Negative-rate bonds surged in 2016.

The latest sign that Europe’s troubled economies are bouncing back has emerged in a drop in the worth of its long-term debt that pays investors less than zero.

The total value of negative-yielding sovereign bonds fell to $8.6 trillion as of March 1 from $9.1 trillion at the end of 2016 on the back of falling prices and rising long-term yields in Europe, according to Fitch Ratings on Monday.

“Stronger-than-expected economic growth indicators and rising headline inflation in the eurozone have likely contributed to the increase in yields on longer-dated eurozone sovereign debt since bottoming last summer,” Jonathan Boise, associate director of macro credit at Fitch, said in a report.

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