Italian and Greek bonds now have lower yields/rates (i.e., considered lower risk(?)) than US bonds:

* https://www.investing.com/rates-bonds/

Couldn't be bothered to read the article before commenting?

> James Bilson, global fixed income strategist at Schroders, said fiscal policy and debt sustainability are crucial for bond markets and the current rise in U.S. yields is not yet a sign of increasing sovereign credit risk.

> The cost of insuring U.S. sovereign debt against the risk of default, as reflected by credit default swaps, has fallen to its lowest since February, for example.

> "Combined policy is too loose to deliver sustained 2% inflation," he said. "This, in one line, is the root cause of the current weakness in bonds. Solve inflation, and many other problems become much easier too."

	▲	throw0101c 2 hours ago \| parent [-]
		> Couldn't be bothered to read the article before commenting? I've been not-reading articles since the early days of Slashdot.

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zeroonetwothree a day ago | parent | prev | next [-]

Rates also encode inflation expectations. So it may be that inflation is expected higher in the US

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chollida1 a day ago | parent | prev | next [-]

> Italian and Greek bonds now have lower yields/rates (i.e., considered lower risk(?)) than US bonds

That's not what rates indicate. its one component, but its far from a straight line from higher rates to more risk.

You can't really compare bonds that pay in different currencies by Rate alone.

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malfist a day ago | parent | next [-]

Why not? Percentage is the same for dollars as it is for yen or franks or pesos

	▲	05hundred a day ago \| parent \| next [-]
		Well for one thing, different currencies have different rates of inflation. If one currency has 10% inflation and another has 1%, the second countries bonds at 5% will have a higher real return than the first, even if the risk of defaulting were the same, so the first country will have to offer a much higher coupon to find any buyers. Also governments can influence demand, e.g. by mandating banks or pension funds buy their bonds, thereby pushing yields down, without changing the risk of default.
	▲	chollida1 20 hours ago \| parent \| prev \| next [-]
		> Why not? Percentage is the same for dollars as it is for yen or franks or pesos That's a fair question if you aren't int he industry. Inflation would be the best example of why you can't do that. Would you rather have a Zimbabwe bond that pays 10%(when they had 10,000% inflation a year) or a US bond that pays 5%
	▲	rdm_blackhole a day ago \| parent \| prev [-]
		The eurozone countries' bond rates are distorted by the Euro.

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a day ago | parent | prev [-]

[deleted]

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Cruncharoo a day ago | parent | prev | next [-]

Sort of. You also have to consider exchange rate futures, the value of the currency you will be getting paid in may change dramatically.

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a day ago | parent | next [-]

[deleted]

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seanmcdirmid a day ago | parent | prev [-]

Is the euro doing or expected to do something strange?

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Cruncharoo a day ago | parent | next [-]

Not sure, not my domain. My comment was just highlighting that comparing the yields on two sovereign bonds with the same maturity doesn’t necessarily mean one is riskier than the other, there are other factors.

	▲	seanmcdirmid a day ago \| parent [-]
		The main complaint from Greece and Italy has been that Germany (and maybe even France) demanded (and got) strong monetary discipline for the Euro, so I'm pretty sure that the Euro itself isn't going to affect their debt much.

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zaik a day ago | parent | prev | next [-]

Hopefully I'm looking at the right thing, but it looks like market expections are that you will get more USD per EUR in the future: https://www.cmegroup.com/markets/fx/g10/euro-fx.quotes.html

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wongarsu a day ago | parent | prev | next [-]

Maybe the USD is expected to lose value against the euro?

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tokai a day ago | parent | prev [-]

Eurobonds being discussed again maybe?

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brainwad a day ago | parent | prev | next [-]

Italy recently issued USD-denominated bonds, which are directly comparable, and the yields are much higher. The 30y ones are at 6.21% YTM now, vs 5.37% for US 30y Ts. For comparison, Alphabet borrows cheaper than Italy: 6.02% on 2060 maturities.

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rurp 20 hours ago | parent [-]

It's wild to me that a private company in a volatile industry like Google can borrow so cheaply for such a long period. I get that they have been wildly profitable and powerful in recent years, but modern history is absolutely stuffed with companies that seemed invincible at one point but then were dead or dying a decade later.

Tech in particular has an awful lot of churn. There's isn't a single tech company in the world that I'm highly confident will be reliably printing money 34 years from now.

	▲	brainwad 6 hours ago \| parent [-]
		Yeah, but on the other hand the borrowing is relatively small compared to the company, so even if the company shrinks by 90% it will still be serviceable. Many western governments including the US have ridiculous debt loads at multiples of their GDPs; such high debt loads push up their interest rates. If you look at a less indebted country, like say Switzerland (22% of GDP, vs 115% for the US), then the premium paid by Alphabet over government bonds is a bit higher: 2.04% on 25y Alphabet CHF bonds vs 0.71/0.62% on 20y/30y Swiss government bonds.

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mono442 a day ago | parent | prev [-]

The ECB keeps its interest rate much lower (2,4%) than the FED (3,75%).