Tag Archive: Government Bonds

China and the US at sovereign debt war

2023-01-27

US dollar hegemony has long been a standard feature of the global financial and economic system. But developments in recent years and months (weeks, even) suggests there are more than a handful of countries who are looking to rely less on the US dollar. Instead countries who have long been at the mercy of the US dollar are looking to take their finances into their own hands…and gold is set to play a key role.

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They’ve Gone Too Far (or have they?)

2021-01-10

by Jeffrey P. Snider

2021-01-10

Between November 1998 and February 1999, Japan’s government bond (JGB) market was utterly decimated. You want to find an historical example of a real bond rout (no caps nor exclamations necessary), take a look at what happened during those three exhilarating (if you were a government official) months.

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Why The Japanese Are Suddenly Messing With YCC

2019-10-06

by Jeffrey P. Snider

2019-10-06

While the world’s attention was fixated on US$ repo for once, the Bank of Japan held a policy meeting and turned in an even more “dovish” performance. Likely the global central bank plan had been to combine the Fed’s second rate cut with what amounted to a simultaneous Japanese pledge for more “stimulus” in October. Both of those followed closely an ECB which got itself back in the QE business once more.

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Japan: Fall Like Germany, Or Give Hope To The Rest of the World?

2019-08-29

by Jeffrey P. Snider

2019-08-29

After trading overnight in Asia, Japan’s government bond market is within a hair’s breadth of setting new record lows. The 10-year JGB is within a basis point and a fraction of one while the 5-year JGB has only 2 bps to reach. It otherwise seems at odds with the mainstream narrative at least where Japan’s economy is concerned.

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Bonds And Soft Chinese Data

2017-11-04

by Jeffrey P. Snider

2017-11-04

Back in June, China’s federal bond yield curve inverted. Ahead of mid-year bank checks, short-term govvies sold off as longer bonds continued to be bought. It was for some a rotation, for others a reflection of money rates threatening to spiral out of control. On June 19, for example, the 6-month federal security yielded 3.87% compared to a yield of 3.525% for the 10-year.

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Systemic Depression Is A Clear Choice

2017-04-05

by Jeffrey P. Snider

2017-04-05

Looking back on late 2015, it is perfectly clear that policymakers had no idea what was going on. It’s always easy, of course, to reflect on such things with the benefit of hindsight, but even contemporarily it was somewhat shocking how complacent they had become as a global group.

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Swiss National Bank: Composition of Reserves (Assets) and Investment Strategy

The Q1/2016 update on the SNB investment strategy and its assets. The Swiss National Bank is a passive conservative investor. As opposed to other investors, the exposure in currencies is as important as the strategic asset allocation according asset classes (bonds, equities, cash, real estate). The importance of currencies is one reason why the SNB is often called a hedge fund, the second the volatility of gains and losses.

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Government bond yields by country and maturity

We judge that negative or close to zero yielding government bonds reflect three points: Risk off environment, long-run currency gains on currency with low inflation, insufficient supply of government bonds for bank refinancing purposes.

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The New Widow-Maker Trade: Short Italian Government Bonds

We think that, similarly as Japanese JGBs, Spanish and Italian Government Bond Yields will continue its race to the bottom, Short Italian Bonds is the new Widow-Maker Trade.

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SNB Q1/2014 Results: 1.7% annualized Yield on Seigniorage, 2% annualized Loss on FX Rate Change

results estimate snb 2013 fx gov. bonds corp. bonds gold stocks interest incime stab. fund total

The main task of a central bank occupied with QEE (quantitative easing or exchange intervention) is to obtain higher gains on seigniorage than it loses with its "ever appreciating" currency. Otherwise its equity capital would be absorbed.

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In Which Positions Does the SNB Win and Where Does it Lose Money: Details on the Q3 Results

2013-10-30

by George Dorgan

2013-10-30

UPDATE October 31, The official press release focused on the results for Q1 to Q3. The loss was 6.4 billion after a 7.3 bln. CHF loss in the first two quarters. Over all three quarters especially gold and the yen weakened the central bank’s positions. For the third quarter, it means that income was positive … Continue reading »

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SNB Q2/2013 Composition of Reserves

2013-08-02

by George Dorgan

2013-08-02

We regularly publish the SNB asset structure by currency, rating & duration, they might be a template for the tactical asset allocation in these dimensions (CHF certainly excluded) for other fixed income and/or rather conservative asset managers. here the newest data Total Balance Sheet and Liabilities The total balance sheet size decreased from 511 bln. …

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Our Detailed Estimate of SNB Q2 Results: 17 Billion Francs Loss, The Reality 18 Billion

2013-07-30

by George Dorgan

2013-07-30

UPDATE: July 30th, 2013: Our estimate for the quarterly loss missed the reality by 1 billion francs. The quarter results: 18.3 billion francs loss. The loss for H1 was 7.3 billion CHF. July 1st 2013: We estimate that the Swiss National Bank (SNB) obtained a loss of 17.3 billion francs in the second quarter 2013. … Continue reading »

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SNB Q1 Results: Bottom-Fishing Cheap Yen, Increases Equity Share with Gains and Margin Debt

2013-04-30

by George Dorgan

2013-04-30

We regularly publish the SNB asset structure by currency, rating & duration, they might be a template for the tactical asset allocation in these dimensions (CHF certainly excluded) for other fixed income and/or rather conservative asset managers. Composition of SNB Forex Reserves, Q1/2013 With the strong results of 11.2 billion francs, the SNB reduced the …

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Composition of SNB Reserves Q4, 2012, Yield on Investment

2013-03-07

by George Dorgan

2013-03-07

We regularly publish the SNB asset structure by currency, rating & duration, they might be a template for the tactical asset allocation in these dimensions (CHF certainly excluded) for other fixed income asset managers. Moreover we publish the yield on investment. Composition of SNB Forex Reserves, Q4 2012 The Swiss National Bank (SNB) saw …

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Trade Like a Central Bank: Buy EUR/USD at 1.24 and sell at 1.30! .. SNB

2012-10-31

by George Dorgan

2012-10-31

Composition of SNB Forex Reserves, Q3 2012 The Swiss National Bank (SNB) reduced the share of euros in the third quarter substantially from 60% in Q2 to 48% in Q3 and increased dollar and pound positions. The SNB bought 80 billion euros or more when the common currency was trading around 1.24$, especially at the end of …

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Did the SNB Front-Run ECB Decisions Far Ahead of Hedge Funds?

2012-10-30

by George Dorgan

2012-10-30

We think that the Swiss National Bank invested far more in Italian and Spanish bonds than analysts like Standard and Poor’s expected and was able to front-run ECB decisions. This new style of hedge funds, formerly called “central banks”, can refinance at zero percent and is able to show a lot better performance than the …

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Is Standard and Poor’s a Rating Agency or a Rumor Agency ?

2012-10-01

by George Dorgan

2012-10-01

Standard and Poor’s critique of the Swiss National Bank, Part 2, extracts from our full report As many readers of our blog know, we are not the best of friends with the current Swiss National Bank (SNB) policy: we recently published a paper claiming that the SNB will go bankrupt and …

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Are German Bunds finally heading for the big slide ?

2012-09-14

by George Dorgan

2012-09-14

Citibank judges that the Swiss National Bank (SNB) does not need a peg anymore. The EUR/CHF exchange rate would be now over 1.20 even if exposed to the free market. Yesterday we showed that the upward move in the EUR/CHF is just the behavior of some euphoric Forex traders. In the meantime we see a completely … Continue reading »

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