The fall of issued bonds the world’s largest economy, the programs of quantitative easing and low inflation will continue to strengthen the demand for government bonds, in spite of an increase in key u.s. interest rates, considers the Rabobank International.
The amount of debt that the Government will the world’s largest economy will have to refinance in 2016. It is slightly higher than the previous year-for about 100 billion dollars. States tend to reduce the budget deficit to a one-third compared to the record levels recorded during the financial crisis.
The value of bonds, Treasury bills and other debt securities that will issue the G7 Member countries and of Brazil, China, India and Russia this year will be one billion, compared to $ 7.1 on 7 trillion and 7.6 billion in 2012, Japan, Germany, Italy and Canada will slow down the depreciation of the debt, while the United States, China and Britain step up, according to data collected by Bloomberg.
The amount of overdue debt gradually rising ever since Bloomberg 2012. He started to collect data. The fall could support the market of bonds while the Fed intends to gradually increase the reference interest rates, depressing the yields at record low levels. Economists predict that budget deficits in 2016. to fall for the seventh year in a row because Governments are struggling with the financial crisis has been declining consumption.
During the crisis, there were a variety of reasons for fiscal expansion, from stimulating growth to efforts to get a long switch from the private to the public sector, but it is now past. Most of the countries now tends towards fiscal discipline.
However, the fact that the Government now under less pressure to incur debt does not mean that there will be indeed a less indebtedness, i.e. that it will issue less debt paper. This will depend primarily on their needs.
This year Germany is planning to issue debt papers worth 203 billion euros (221 million. dollars), while the last year issued around 175 million euros, mainly to cover the cost of the record influx of migrants.
The biggest proportional fall editions will have Russia and Brazil, with a drop of 38 and 26 percent, according to Bloombergovi data.
With interest, the amount of debt that the G-7 countries and BRICS have to refinance this year amounts to 7.8 billion dollars, which was also a slight change in comparison with the previous year.
According to the index, Bank of America Merrill Lynch Government bonds earned investors a return last year of 1.2 percent, compared to 8.4% in 2014. and average of 4.4 per cent over the past five years. Yields, which are inversely proportional rates, start to grow in parallel with the phasing out of the recession, reducing the demand for bonds that are in times of crisis are considered a safe harbor for investors. When it should not be ignored that the American Central Bank plans this year in four occasions to increase interest rates.
Yields on u.s. 10-year bonds will climb through the end of the year to 2.75 percent, predict analysts at Bloombergovoj poll. This morning, yields on the London market were on the
2.25%.
That could encourage investors to seek higher fees for holding the other bonds, and even those that are issued by Germany or Japan, whose yields are currently low because their central banks implemented the program of monetary loosening, increasing the money supply through the purchase of bonds. The average yield in the Bank of America Merrill Lynch Global Government index both rose on 1.1 percent after in January last year sank to a record low 0.82%.
In the u.s., the world’s greatest debtor with one billion on the market obligations 13.1 debt, the amount outstanding of Government securities will rise 14 percent to 3.5 billion dollars. With the largest growth in the need for the saved amount of debt will face China-this year it must refinance 41 percent more than last year, 254 billion dollars.
The fall of issued bonds the world’s biggest economy, with programs of quantitative easing and low inflation, and will continue to strengthen the demand for government bonds, in spite of an increase in key u.s. interest rates, considers the Rabobank International.
The budget deficits of the countries of the developed world will decrease this year at an average value of 2.4% of GDP, economists predict. The estimated average for the year 2015. amounts to 2.6%, and average a record budget deficit of 7.2 percent recorded in 2009. of the year.