29.07.2009 12:12

Bond Market Report- July 2009

Islandsbanki Research has published outlook for the bond market.

Main findings:
Treasury notes -We forecast falling yields
Declining short-term rates continue to weigh down notes yields.  On the other hand, the surfeit of liquidity in circulation will decrease and a substantial notes supply in coming quarters will also counteract the downward yield tendency.
 
HFF bonds -Short-lived yield increase
We expect that, as the monthly CPI increase slows, HFF bond yields will rise somewhat. A limited supply and drop in non-indexed rates, however, should keep HFF bonds in demand and lower yields after that, however. The market break-even rate should continue to be higher than expected inflation.

Below is ISlandsbanki Research's bond market outlook

Attachments

  Bond outlook July2009.pdf (49 Kb)

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