Global Money Matters: Rajesh Sharma Money Matters

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US Treasuries prices rose on Wednesday as concerns over repercussions from a possible

Greek exit from the Eurozone increased demand for safe haven US debt.10 year notes were at 1.73% down from 1.78%. Germany sold 4.56 billion euros ($5.8 billion) of bonds carrying a zero percent coupon on Wednesday, its first ever sale of debt offering investors no regular return and underscoring its safe haven appeal at a time of turmoil in the euro currency zone.

Pricing the bond just below face value gave an average yield of just 0.07%, almost free money for the biggest economy in the euro zone. To put the zero percent into perspective, on a 13.5 billion euro January 2014 bond, paying a 4.25% coupon, Spain has annual payments of almost 600 million euros. Jointly backed Euro bonds would make sense only when euro zone reaches some kind of fiscal union, ECB President Mario Draghi said at the end of a meeting of EU leaders.

Japanese government bond prices gained on Thursday as worries Greece may exit from the euro zone brought in the risk-averse investors while expectations of strong demand at a 20 year JGB auction also lent support, flattening the yield curve considerably. Rajesh Sharma Money Matters Financial Services Ltd.The 10 year yield fell 1.5 bps points to 0.845% , though market players say buying could slow near nine year low of 0.815 percent hit last week.

German government bond yields fell to record lows on Wednesday as investors bought the safest assets before a meeting of euro zone leaders to discuss the debt crisis, while a sale of two year bonds carrying a zero percent coupon drew strong demand. Thirty year government bond yields fell below 2% for the first time, while two year bond yields fell as far as 0.02%, mush lower than the 0.11% and 0.29% offered by similar Japanese and US debt.

The 10 year gilts fell to a record low and gilt futures hit a contract high driven by deep seated concerns about the euro zone and speculation the BOE will soon inject more stimulus into the British economy.-says Rajesh Sharma Money Matters Financial Services Ltd. In the cash market 10 year gilts was some 9 basis points down at 1.78% tightening the spread against Bunds by around 1 bps points to 38.5 bps points. The yield fell to a record low of 1.755% earlier in the day. The New Zealand government plans to issue up to NZ$13.5 billion in bonds in the 2012/13 fiscal year, NZ$1.5 billion more than its previous forecast, while also increasing debt issuance in the current year by same amount.

by: Kiran K.

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