08/19/2016
Crashing Yields - post-Brexit
Bond yields in Europe have cratered since Britain’s Brexit referendum, June 23. When the Brits opted to leave the European Union against all expectations, the shock of it resulted in further easing and bond buying from the European Central Bank and the Bank of England, amid concerns over Brexit’s impact on the regional economy. This then spilled over into bond markets around the world as the search for yield hit a fevered pitch.
So I thought I’d show you the difference in yields on 10-year sovereign bonds, including in the U.S., between Thursday, June 23, the day of the vote (the result not known until late that evening) and the new lows hit in many countries on Friday, Aug. 12.
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10-year bond yields
U.K. 1.37% (June 23)... 0.52% (Aug. 12)
Germany 0.09%... -0.11%
France 0.45%... 0.11%
Italy 1.39%... 1.04%
Spain 1.46%... 0.92%
Portugal 3.06%... 2.67%
Greece 8.31%... 7.99%
U.S. 1.74%... 1.51%
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Wall Street History will return in two weeks.
Brian Trumbore
