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Current Events In Bond Markets
The bond markets are really hot these days and it is a good thing to read all the current events in bond markets so that you are constantly up-dated on what is happening not just in the U.S. but also in the rest of the world. |
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For the U.S. dollar things are not so bright at the moment. The euro has displaced the dollar as the world’s preferred currency in the international bond markets and this has happened for the second year in a row.
In September 2007, the value of euro notes in circulation had overtaken the dollar for the very first time. According to International Capital Market Association, the outstanding debt issued in euros was equivalent to $4,836 billion at the end of 2006 as compared to $3,892 billion for the dollar. The same prognosis is expected for the euro at the end of 2007, however, the value will definitely be higher.
The dominance of the euro is in sharp contrast to what was happening as recently as 2002. The U.S. bond market dwarfed the euro and the outstanding euro issuance was just 27 percent of the total world issuance while the dollar dominated the world with 51 percent. However, in 2007 the outstanding euro-dominated issuance internationally stood at 45 percent while the dollar debt account is down to 37 percent.
Many think that the euro is dominating because of growing issuance by debt laden European governments. However, the fact of the matter is that many financial institutions and companies all over the world prefer issuing bonds in euro nowadays. Many think that the stable interest rates in Europe have helped the euro strengthened and they could not be too far from the truth.
In the international scenario, the size of bond issuance has doubled in the last six years and this is an extremely good sign for the bond markets across the world. This is the reason why you should spend time catching up on the current events in the bond markets. You never know how the information will help you.
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