German bonds rise with euro as investors head for Europe’s haven

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Investors say that the simultaneous increase in government bonds in the euro and the German government this month indicates a “capital journey” to the debts of the euro area as news of trade war disturbances.

German bonds and euro usually move in opposite directions, because optimism about the economy – which enhances the currency – harms demand for debts that are the safe origin of the euro mass. This pattern was held after the country’s historical spending deal last month, which witnessed the rise of the euro and the Bund.

But this month, the euro jumped about 5 percent against the dollar, even as a via Atlantic gap is expanded in bond returns, which increased the additional rate provided by the treasury. The US borrowing costs for two years are now about 2 degrees Celsius higher than those in Germany, up from about 1.7 percentage points in early March.

The usual relationship between the euro and the relative rates “has completely collapsed in the past two weeks, as Bunds and Euro have benefited from the market concerns caused by American policy.” He added that this was “the symptoms of a capital trip.”

The simultaneous decline in the American cabinet and the dollar, which usually moves in opposite directions, squeeze the nerves in Wall Street. But in Europe, the investors were similarly shocked by the increase in the prices of German Bund and the euro.

“The currency markets are not concerned with interest rate dynamics.” [for the dollar]”.

He added: “It seems that there are some global transformations to allocate assets, as global investors are looking to diversify away from the United States and look at Europe and the rest of the world as a more attractive place to invest.”

Fixed income specialists say global investors re -evaluate the cabinet’s attractiveness as a haven amid concerns about American policy -making.

April Laros, head of Invest Investment investment specialists, said that investors are looking outside the United States about “a safe government, a spirit of law and We-Can-Rile-Ite, with a good economy.”

She pointed to the increasing tank fluctuations in recent years. The Ice Bofa Move, a measure of the expectations of bond investor for future fluctuations in the treasury, has been at high levels since the sale of the 2022 bond market. Last week, it touched its highest level in more than a year during the treasury period.

But there are still large barriers in front of German factors that replace the cabinet as a global safe origin for selection, as the market was just a small part of the US government bond market of approximately 30 Triniton. The historical Bunds scarcity has seen their long -term circulation with the yellow branch.

The treasury status as the preferred global reserve is also associated with the dominant role of the dollar in global financing and trade, even if the commentators say that this is tested through a crisis of confidence in the American policy industry.

Stephen Megor, the global head of fixed income research at HSBC, said that the demands of secular transformation away from the treasury lost that “the marginal buyer of the treasury treasury was increasingly a local investor” because some foreign investors restore their property.

But there are signs, as the fund managers say, that the major global investors are already looking to diversify their safe assets, with a major beneficiaries as Germany increases the issuance of spending plans.

BUND revenues were tightened in the short term on Thursday, as the European Central Banking prices and merchants reduced more upcoming discounts. The euro did not change a little.

“There are some investors taking a look at Europe in a way that they have never been before,” said Laros from Insight.

Additional reports by Ray Douglas