financial times comment

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Week9
4.17
1. The Bank of Japan has moves to negative rates, and the ECB
announced it would cut further.
Comment:It increase incentives for banks to lend money, the quantity of
money will increase, and more investment on the bond market, so the
yield will decrease.
2. Valeant receives notice of default from bondholder in Canada
Comment:This gives the company's credit agreement flexibility and is
good for the corporate bond
4.16
1. Chinese bond defaults by state-owned enterprises are on the rise
Comment:It is good for Chinese bond market because it means the bond
market of China tends to open. SOE defaults are healthy for the long-term
development of China's debt market because they reduce moral hazard
caused by the widespread assumption of a limitless government backstop
for the bond market.
2. The ECB's announcement that it will start buying corporate debt in
June.
Comment:The bond prices have risen and the yield will decrease, which
is good for Euro bond.
4.15
1. China's spillover to global financial markets will increase. and the
direct impact of China on financial market increases.
Comment:It is good for Chinese bond market, because the demand for
Chinese bond market increases and the yield decreases.
2. Oil rally forces nervous investors back into energy junk bonds
Investors scramble into the distressed oil and gas sector, despite the risk
that a still volatile oil price could easily reverse a rally that has driven
crude to its high for the year.
Comment: this is a bad new for the yield of junk bond.
4.14
1. Corporate bonds trump European stocks as verdict mixed on ECB
The performances of European equity and corporate bond markets have
diverged sharply this year, underlining that while the European Central
Bank has succeeded in driving down the cost of debt doubts remain over
whether its measures can help ignite earnings growth for the region’s
companies.
Comment:This news is benefit for corporate bond, because this can give
confidence to the investors.
2.US appeals court clears way for Argentina bond sale
A US appeals court has cleared the way for Argentina to raise as much as
$15bn to pay holdout creditors, enabling the Latin American sovereign to
re-enter international capital markets after more than a decade on the
sidelines
Comment: this is negative for the Argentina bond yield. But this can
protect the American bond to develop.
4.13
1. Government remains keen to keep monetary policy
ultra-accommodative as they attempt to foster growth
Comment:The German 10-year Bond yield is down one point basis point
because this easing monetary policy will increase the investors’ money so
that the demand for investment in bond market increases.
2. Fitch maintains US AAA rating
Comment:It would lower the yield to 2.1%, compared to the previous
expectation of 2.5%.