When the forex market relatively calm, most activity happens in the stock and bond sites. After a shaky few days, stock markets began to feel that Europe is likely to find a way to avoid a debt crisis, instead focusing on the good economic news from the U.S.. Debt markets, however, were in a particularly bad mood. Yield of a decade of top-notch stock market in Britain grew by 14 points, the yield of ten-year Buwayhids rose 10 points per day. Last rose by 50 points in just two weeks. Yield European periphery was noted by narrowing spreads on the head with Greece, which spread towards the Bund fell by almost 30 points. Overall, it was a difficult time for the bonds as an asset class - the currency is currently discounted quantitative easing (which activates the fears regarding the long-term inflation), fiscal deficits, for the most part, are enormous, and resistance to tightening measures also increases, and the real rate of return is extremely low, especially because of the longer maturities.
And what's worse, politicians in some economically developed countries are committed to making bondholders participating in the banking sovereign default. Similar Irish nine-year subordinated securities fell in price to 45 pence yesterday, down from 100 points in September amid fears that the guys from the IMF would impose costs to bondholders. In the FT yesterday, expressed the interesting suggestion that the Anglo-Irish dependent bondholders voted today to accept or not 20 pence on their bonds! Voting results will appear on Monday, which will be an interesting test of principle bondholders.
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