Institutional Investor (June 28)
2015/ 06/ 29 by jd in Global News
“Yields are negative in multiple European markets,” for both sovereigns and corporate bonds. “The zero bound has therefore been broken, proving that it is just that—a mere boundary, as opposed to an impenetrable threshold.” Given the demand for liability matching and quality assets, there’s no certainty that yields can’t fall further into negative territory. “All of this serves to highlight the strangeness of the world we now live in. Daily usage of words like ‘unprecedented’ and ‘exceptional’ renders them almost meaningless. In this case, however, they ring true. Corporate bond yields turning negative truly is unprecedented.”
