The Debt Capital Markets

Readers will be familiar with the cursory slot on evening television news, where the newscaster informs viewers where the main stock market index closed that day and where key foreign exchange rates closed at. In the United States most bulletins go one better and also tell us at what yield the Treasury long bond closed at. This is because bond prices are affected directly by economic and political events, and yield levels on certain government bonds are fundamental indicators of the economy. The yield level on the US Treasury long bond reflects the market’s view on US interest rates, inflation, public sector debt and economic growth. Reporting the bond yield level reflects the importance of the bond market to a country’s ...

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