Forex markets are eyeing their brethren, the bond market, for direction.
Result: In 67% of the surveys consensus estimates for the 30-year Treasury bond were in the wrong direction.
Uncertainty about the direction of the bond and stock markets and a lack of buyers in the credit markets is creating a stampede to the safety of U.S. government bonds.
With many banks moving further into the securities business, the answer depends partly on the uncertain direction of stock and bond markets.
Relying on the bond trustee to decide when to declare a default is a hit or miss exercise since the trustee is under the direction of the current bondholders and the bond indenture, both of who may limit his actions in this regard.
FORBES: Even If A Bond Doesn't Default, You Can Still Lose Your Money
But inflation won't come without a similar rise in interest rates and yields, which means that bond prices, which move in the opposite direction, should eventually fall.
As default risk is the primary driver of high-yield corporate bond prices, as opposed to interest rate direction, when the economy expands, the risk of high-yield corporate bonds defaulting is reduced and this is reflected in lower volatility.
QE3, you see, has repercussions for the dollar, for the direction of gold, for the direction of interest rates, and therefore bond prices.
That is, when yields rise the price or value of bonds declines, and in the other direction, when yields are falling, bond prices rise.
It has been commonplace to hear, after years of mutual fund outflows from equities into bond funds, that money has begun to flow in the opposite direction.
Spain and France both come to the bond market today and whether they are successful or not will ultimately decide the direction that the EUR will take in the medium term.
If bond prices failed to rise given such a Herculean effort to lift them up, there can be only one direction for them to go: down.
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