The interest rates associated with Portuguese bonds are falling across all maturities. Within 10 years, the reduction is greater than 20 bp, which raises the “yield” to the lowest level each time when trading below 3%. Fall is widespread in Europe, with investors reflect Draghi’s words.
The interest rate implicit in the bonds two years is down 17.8 basis points to 0.733% within five years, the decline was 24.8 points to 1.543% and the 10 years the decline is 24.4 points to 2.994%. In the last two periods referred rates are even trading at historic lows.
The fall in interest rates in the secondary market is to be generalized. In Spain, ranging from a decline of 5.9 points, within two years, and 10.5 points within 10 years. In Italy the rates range from a decline of 7.2 points in two years, 9.0 points to 10 years. The implicit interest rates on French and German debt are also falling across all maturities, albeit with less dramatic dimensions.
contribute to these behaviors are the statements of the President of the European Central Bank (ECB) . Mario Draghi reiterated on Friday, August 22, that the monetary authority is ready to act, if necessary, with more measures to help stimulate economic growth. This at a time when the gross domestic product (GDP) of the Euro Zone has stalled in the second quarter, a period in which Germany contracted, Italy came back into recession and France stagnated. And where data on inflation increase fears about deflation in Europe.
In this approach, Mario Draghi also defended the European Union countries should implement economic stimulus measures, dropping speech austerity, which also is contributing to an increase in confidence among investors.
(News updated at 11h01 with the information that the 10-year rate dropped to a value below 3%)
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