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Strategies & Market Trends : Humble1 and Swing Trading Friends

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From: humble12/8/2018 4:19:53 AM
   of 41144
 
Debt Apocalypse Now: Why Yields Will Explode

(a shocking surprise from the 10 year demand side)

bloomberg.com

The problem is that overseas buyers are facing mounting costs to protect their bond positions from swings in foreign exchange markets. And given the potential for trade conflicts and monetary-policy shifts to spur currency volatility around the world, there are plenty of reasons to have that insurance.

With the hedging costs taken into account, euro-zone investors only get a yield of about 0.46 percent from owning 10-year Treasuries, compared with a 2.84 percent rate for domestic buyers as of Wednesday. Japan-based funds only earn 0.66 percent.

Higher demand might otherwise have been a silver lining for the climb in yields that’s roiled stocks recently. In fact, bidding at a 10-year note auction Wednesday saw the weakest demand since September.
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