European countries have to pay more interest on their foreign debts than Brazil does for similar long dated maturities.
If this happens, it provides another reason to sell long dated treasuries.
Yield on U.S. debt is just below 2% for the 10 year and likely to fall lower once the Fed starts buying long dated bonds to flatten out the curve.
For fixed income investors, the word on the Brazilian street is hold on to those long dated bonds because they are about to become a hell of a lot more valuable.
And since insurance companies and pension funds buy long-dated bonds to match their long-dated liabilities, everyone has been scrambling to acquire what appears to be a fast-vanishing asset hence the soaring prices and plunging yields.
There is unmet demand for long-dated paper, says the Bond Market Association, an industry body.
In fact, many, many world-leading American companies now pay dividend yields higher than long-dated Treasuries.
Even long-dated yields are less than 1% in real terms, thanks to demand from pension funds.
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Mr Gross is gloating over his huge purchases of long-dated bonds, and their effect on the market.
And third, the rescue funds should buy long-dated bonds in the primary market to bring down borrowing costs.
But, she says, the thinking was that the spread ought to be wider for volatile stocks and for long-dated options.
The yields on these long-dated bonds is already relatively low, in the 4% to max 6% range for investment grade debt.
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Pension funds have the problem of having long-dated liabilities--in this fund's case, thousands of Ontario teachers whose retirements it must fund.
But it makes a big difference to the value of long-dated options.
Russia's private-sector creditors have agreed to write off more than a third of the debt, swapping the rest for long-dated, low-interest Eurobonds.
But its trading debut came as most perpetual and long-dated bonds in Asia are declining following an uptick in yields on 10-year U.S. Treasurys.
He said the initial reaction by the bond market is a 25- to 50-basis-point spike in long-dated Treasury yields, like 10-year notes and 30-year bonds.
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The yield on U.S. Treasurys on Tuesday touched 2%, a key psychological level that often prompts investors to dump long-dated bonds and buy risk assets.
Their American counterparts, for instance, rely far less on American government bonds, and are much more willing to hold long-dated corporate bonds and mortgage-backed securities.
Under the circumstances, it's a bad bet to buy long-dated bonds.
They may not want to buy long-dated bonds, which are more prone to capital losses as rates rise, at the exact time that issuers are offering higher yields.
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As Americans age, and actuaries and accountants want pension funds to match their assets and liabilities more closely, long-dated bonds from an unimpeachable issuer look just the ticket.
In 2001, in a desperate effort to stave off debt default, Domingo Cavallo, the economy minister, forced them to swap bonds (and cash) for long-dated or low-yielding paper.
Long-dated futures markets for jet fuel are highly illiquid.
Rising interest rates mean losses for holders of long-dated debt, and he says that if it were not for the Federal Reserve's bond-buying programme, US Treasury yields would be "higher, meaningfully higher".
The railway ministry, which is China's largest corporate-bond issuer, used all of last year's quota for long-dated bonds and also raised an additional 50 billion yuan via short-term bills and medium-term notes.
Investors were also ditching long-dated British bonds: the 10-year gilt yielded 3.14% on Monday afternoon in London, up from 3.13% on Friday, while the two-year British gilt lost 5 basis points to yield 1.56%.
They also were buyers of long-dated Mexican bonds.
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Many investors, especially in low interest rate countries like Japan, can borrow money at low cost and invest it in Brazilian local currency bonds that pay much higher yields for both short and long-dated bonds.
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