Re:Interest Rates: Naturally Negative?
by samsonradu on Tuesday August 13, 2019 @05:26PM
(#20690427)
Well one has to consider that it's pretty much the same big pool of money chasing both. This money pool thinks that German 10Y yield should be around -0.60%, while the Italian 10Y yields a juicy 1.62%. That says quite a bit about the future solvency issues around Italy.
Bottom line is that if there are still positive yielding bonds in a market dominated by negatives (we're not yet there) the risk of default is priced in.
Bottom line is that if there are still positive yielding bonds in a market dominated by negatives (we're not yet there) the risk of default is priced in.