Friday, August 26, 2011

Onwards and downwards

As predicted by Cathal in the comments the Irish ten-year bond yield as calculated by Bloomberg has indeed dropped below 9% this week.

Bond Yields 3M to 25-08-11

This has been a remarkable performance.  It would have been reasonable to expect the surge in the yield in the run up to the EU summit to be reversed.  However, a drop from 14% to 11% would have been enough to achieve that.  Instead the yields have continued onward and downward and are now at 8.8%.


  1. Seamus

    I like to think that my often stated (excel calc) premise may have influenced at least one investor.
    'Even with a 25% day one default, Irish bond would still beat the German bond over a 6 year period.' That was when yields were just over 10%.
    Irish bonds are still are very good investment.

  2. Yes, I thought that I might have been too optimistic in seeing bond yields below 9% by the end of the week. Thankfully that possibility came to pass on Friday. What's satisfying about the recent bond market activity is that the yields have resumed their rapid decline which paused mid-August. We could even see sub-8% bond yields by September!