Quirin Privatbank sees higher bond reinvestment returns outweighing short-term price losses
TLT•Quirin Privatbank sees no imminent European or global debt crisis despite rising government bond yields. It says higher reinvestment yields should outweigh short-term price losses over the medium to long term in broadly diversified portfolios.
1. Bond yield outlook
Quirin Privatbank said it sees no imminent European or global debt crisis despite rising government bond yields. France now has the euro zone’s highest government borrowing rates, with public debt around 115% of GDP. French 10-year government bonds have lost nearly 7% year-to-date, including accrued interest, compared with roughly 3% for German equivalents. The bank expects the European Central Bank to intervene if further yield increases threaten euro zone stability.
