A USD 4 Trillion Move
Jeroen Blokland | Oct 22, 2019 13:01
Global bond yields have been rising recently, thanks to progress on two yield-depressing events: Brexit and the US-China trade war.
The ECB possibly reaching peak monetary easing may have contributed as well. The revolt after the latest round of QE, which could theoretically go on until infinity, was considerable. And reluctance against more easing seems to be large as well. As a result, the amount of negative-yield debt has decreased by a staggering USD 4 trillion. As a percentage of all outstanding debt, reflected by the Bloomberg Barclays (LON:BARC) Global Aggregate Index, negative-yielding debt has dropped below the levels seen in 2016.
So are we past peak negative-yield? I doubt it, because central banks around the globe, and especially the ECB, have zero room for normalization before the next recession hits.
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