Photo: Ricardo Moraes / Reuters
The volume traded in the world of government bonds with a negative yield reached a record. This writes CNBC, citing data from Deutsche Bank.
According to his calculations, the issue of government bonds with a negative yield now stands at 15 trillion dollars or 25 percent of the market. According to the Bank, their number has almost tripled from October 2018. For example, in Germany the yield on 30-year government bonds last week for the first time in history became negative.
As noted by CNBC, the reason for this was, in particular, the loose monetary policy of Central banks, which is trying to stimulate economic growth. Leading European regulators are buying bonds (this policy is known as quantitative easing), leading to higher prices and negative returns.
In addition, the soft policy of Central banks can become the reason for the debt load of the population due to low interest rates on loans and, as a consequence, lead to the inflation of the “bubble”. Another factor that contributed to the situation, analysts say a trade war the US and China, which destabilizie global markets.
Analysts say that this is the situation in the market of government bonds is unusual because traditionally the holder of the securities receive the income from it, and pays him to make the investment.
In July, the head of the European Central Bank (ECB), Mario Draghi signaled that the European regulator, probably before the end of the year will reduce the key rate. In addition, the head of the ECB has been assigned to determine what other measures to stimulate the European economy.
Video, photo All from Russia.