Bonds
in sentence
2285 examples of Bonds in a sentence
Investor confidence is on the mend, exemplified by the recent placement of €10 billion ($13.8 billion) in ten-year government
bonds
– which was over-subscribed by four times.
While risk premiums on ten-year
bonds
remain far above pre-crisis levels, yields have dropped considerably, from 4% at the beginning of 2010 to 3.2% today.
This would move the EU away from the current situation, in which all sovereign
bonds
denominated in euros are treated equally, regardless of the issuer’s debt position.
The presidential campaign of US Senator Bernie Sanders, which dominates the intellectual debate in the Democratic Party, has argued for a broad-based tax covering stocks, bonds, and derivatives (which include a vast array of more complex instruments such as options and swaps).
If economic growth is affected, eventually other tax revenues will fall, and if government
bonds
are covered, borrowing costs will rise.
This time, Bundesbank President Jens Weidmann is warning that the erosion of central-bank independence in some countries – reflected in the Bank of Japan’s recent decision to buy an unlimited number of government
bonds
to meet its new inflation target of 2% – will trigger competitive exchange-rate devaluations.
It is well known that Weidmann does not like it when central banks, especially the European Central Bank, buy sovereign
bonds.
As of October, the continent has an operational European Stability Mechanism to purchase new Italian and Spanish government
bonds
if investors go on strike.
In parallel, the ECB has announced an “outright monetary transactions” (OMT) program to purchase
bonds
already trading on the secondary market.
With the ESM and ECB capping interest rates on government bonds, countries will have as much time as they need – and they will need plenty – to reduce their debt burdens to manageable levels.
The ESM has limited firepower, and, along with the ECB, will buy only the
bonds
of governments that ask, something that proud leaders are reluctant to do.
Until the second half of 2008, Europe seemed to have reached fiscal Paradise: the market did not differentiate between eurozone governments’
bonds.
By purchasing almost three times the total net issuance of eurozone bonds, the ECB effectively circumvented eurozone rules and began to monetize Europe’s government deficits, as well as creating a mutual support system between strong economies such as Germany and weaker ones like Italy and Spain.
Unless growth is restored, France’s already large public debt will expand unsustainably, heightening the risk that investors will shun French government
bonds.
US Treasury
bonds
rose, and the dollar, Swiss franc, and yen appreciated, most markedly against sterling.
The issuance of risky junk
bonds
under loose covenants and with excessively low interest rates is increasing; the stock market is reaching new highs, despite the growth slowdown; and money is flowing to high-yielding emerging markets.
With interest rates on government
bonds
in the US, Japan, the United Kingdom, Germany, and Switzerland at ridiculously low levels, investors are on a global quest for yield.
What makes US strategy reckless is that the Bush administration is attacking China at the very moment that America's dependence on Chinese purchases of US government
bonds
is growing.
After all, corporate borrowers do not borrow at the “risk-free” yield of, say, US Treasury bonds, and evidence shows that monetary expansion can push down the interest rate on government debt, but have hardly any effect on new bank lending to firms or households.
Those policies pushed up prices of assets – especially
bonds
and equities – that were held largely by wealthy households.
The longer the US postpones the day of reckoning, the greater the risk to the dollar’s global standing as the world’s main reserve currency, and to the attractiveness of US government
bonds
as the true “risk-free” financial benchmark.
There was also his commitment to fight poverty: “To those people in the huts and villages of half the globe struggling to break the
bonds
of mass misery, we pledge our best efforts to help them help themselves, for whatever period is required – not because the communists may be doing it, not because we seek their votes, but because it is right.
Even if they are now willing to accept newly issued
bonds
when interest and principal on outstanding ones are due, the time will come when the US will have to pay the interest by exporting more goods and services than it imports.
This should be combined with the mutualization of some portion of the liabilities of highly indebted countries – defined as a debt-to-GDP ratio above, say, 60% or 70% – and modest write-downs in exchange for long-term zero-coupon
bonds.
The “Brady
bonds"
that the US used to help resolve the Latin American debt crisis in the 1990s could serve as a model.
Staggered alignment of economic and social policies (such as the legal retirement age), new balancing schemes (euro
bonds
as a transfer instrument), and an effective stability mechanism are all needed to preserve the common currency.
Having their
bonds
purchased by the European Central Bank did not keep Greece, Ireland, and Portugal from needing a bailout.
Markets long ago stopped buying
bonds
issued by Greece, Ireland, and Portugal, and might soon stop buying paper issued by Italy and Spain – or do so only at prohibitive interest rates.
But markets would happily gorge on
bonds
backed by the full faith and credit of the eurozone.
And yet risks to financial and fiscal stability could arise if higher inflation and currency depreciation were to spoil investors’ appetite for Japanese government bonds, thereby pushing up nominal interest rates.
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