There are already 12 billion sovereign bonds with negative interest – Bonds

If the economic outlook does not improve and inflation does not resume, "additional stimulus measures will be needed," said Mario Draghi at the beginning of the first day of work of the sixth edition of the Forum of the ECB in Sintra. These are the magic words that caused an immediate reaction of the markets, namely the fall of the sovereign interest.

A few hours after Draghi's intervention, the ten-year interest on French debt came for the first time to 0% and was trading in negative territory. The same thing would apply to the Swedish debt – a country outside the eurozone but part of the European Union – and to Austria. In simple terms, this means that investors do not "ask" these countries to lend money for a decade.

These countries thus join Germany where all sovereign debt maturities up to 15 years negotiate in negative territory. In the case of Switzerland, the public debt negotiates with a negative interest within 30 years. For shorter maturities, you can also find negative interests in other European countries, such as Malta, Bulgaria, Italy, Spain or even Portugal, which have experienced interest rates over the years. first five years about five years ago.

With unconventional monetary policy measures on the ground and more underway, what we see in the markets is also far from common. "I have been in this business for 50 years and never thought that $ 12 billion would have negative interests," said David Kotok, president of Cumberland Advisors, Bloomberg.

The rise of European bonds will face, Wednesday, June 19, an obstacle across the Atlantic. The Federal Reserve will announce the decision of the monetary policy meeting in the late afternoon, which could match the expectations of investors.

Although no economist doubted by Bloomberg is predicting a decline in interest rates, markets are waiting for signals that Fed Chairman Jerome Powell will give on the evolution of interest rates. ;economy. Powell recently admitted the possibility of lowering interest rates, but only if it was strictly necessary.

In the United States, 10-year public debt interest rates are far from 0% and are currently trading above 2%. The lowest level was reached in July 2016 at 1.32%. However, if the Fed starts adopting a more accommodating policy, interest rates on US bonds would also begin to ease.