Mind the gap: US and German Treasury yields

clock • 2 min read

When the relationship between two well-observed and liquid variables in the bond markets reaches multi-year wides, it warrants attention.

The gap between US and German Treasury yields is now at the widest levels observed this century and even before, and back to the wides following President Trump's election victory in 2016.  US Treasury yield curve flattens to lowest level since financial crash Given such a differential, European investors might be expected to seek out the extra yield offered by the US market. However, the decision on whether or when to do so is not as easy as it might appear, and a variety of factors must be considered, including currency hedging costs, the shape of European yield curves and diverg...

To continue reading this article...

Join Investment Week for free

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now

 

Already an Investment Week
member?

Login

More on Bonds

UK gilt yields hit 2024 high as investors mull over Budget borrowing

UK gilt yields hit 2024 high as investors mull over Budget borrowing

10-year gilt yield rises to 4.45%

Valeria Martinez
clock 31 October 2024 • 2 min read
'It is not free money': Bond market warns Reeves to tread carefully with Budget borrowing plans

'It is not free money': Bond market warns Reeves to tread carefully with Budget borrowing plans

Expected changes to fiscal rules

Linus Uhlig
clock 23 October 2024 • 4 min read
Fidelity launches ocean and freshwater-focused transition bond fund

Fidelity launches ocean and freshwater-focused transition bond fund

Managed by Kris Atkinson and Shamil Gohil

Cristian Angeloni
clock 14 October 2024 • 2 min read
Trustpilot