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A comment on Germany for First Time Sells 30-Year Bonds Offering Negative Yields. Parent comment

Re:Germany for First Time Sells 30-Year Bonds Offering Negat... by snowwrestler on Wednesday August 21, 2019 @02:00PM (#20759666)
There are dozens of answers here that explain why institutions buy sovereign debt, in general.

What those comments don't explain is why anyone would buy this particular sovereign debt.

So: why would anyone buy negative-interest-rate German bonds when U.S. Treasury bonds still have positive interest rates, and are available in much higher volumes?

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Re:Germany for First Time Sells 30-Year Bonds Offering Negat... by whatok on Wednesday August 21, 2019 @02:13PM (#20759823)
Because those positive yields are only available if you don't hedge your FX risk. Most institutional investors have a mandate to hedge FX risk and this will take UST returns for EUR investors negative.
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Re:Germany for First Time Sells 30-Year Bonds Offering Negat... by camjw on Wednesday August 21, 2019 @02:07PM (#20759745)
Because you’re a European and have to pay your taxes (or your investors, or other people) in euros, so don’t want any exposure to the Euro/Dollar exchange rate.
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Re:Germany for First Time Sells 30-Year Bonds Offering Negat... by hendzen on Wednesday August 21, 2019 @02:03PM (#20759700)
https://en.wikipedia.org/wiki/Interest_rate_parity
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Re:Germany for First Time Sells 30-Year Bonds Offering Negat... by mdemare on Wednesday August 21, 2019 @03:33PM (#20760761)
Yes. The difference in interest rates implies that the EURUSD exchange rate is expected to rise (slowly) in the coming decades.
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Re:Germany for First Time Sells 30-Year Bonds Offering Negat... by DubiousPusher on Wednesday August 21, 2019 @02:03PM (#20759694)
Diversification. Spreading your money across many governments which are unlikely to default is better than putting it all in one.
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Re:Germany for First Time Sells 30-Year Bonds Offering Negat... by antaviana on Wednesday August 21, 2019 @03:32PM (#20760753)
With diversification you decrease the risk of losing everything and increase the risk of losing something.
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Re:Germany for First Time Sells 30-Year Bonds Offering Negat... by graedus on Wednesday August 21, 2019 @02:12PM (#20759810)
I think there are laws stating that certain kinds of German institutions must buy German bonds, but I'm not sure.
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