Weekly Market Update 10th June 2016

GOVERNMENT YIELDS SENT LOWER UPON UNCERTAINTY

This week, aside from the obvious, there has been a lot of attention on the US election and government bonds. Looking at the most interesting element first, the Japanese issued 10 year bonds that that will cost more to buy than you’ll ever get back from them. There is now $10 trillion of bonds which have these effective negative rates. It is odd that investors are so desperate to lend the government money that they’re willing to pay them to take it; at the same time the German finance minister, who can borrow money at a rate of 0.04 per cent, issued another warning about losing fiscal discipline. Read More….