24 June 2013

Understanding US Treasury & Yields


Just when the whole world coming for a rout, only US treasury yields shoot up to multi-months high. Investors might wondering why this happen. Some of our readers are posting these kind of question to us. We think this article might helps.


US Treasury = US Government Bond

Actually, we are referring to US Government 10 Years Bond. Generally, a government bond is issued by a national government (in this case US) and is denominated in the country's own currency (USD). Bonds issued by national government in foreign currencies are normally referred to as sovereign bonds. The yield required by investors to loan funds to governments reflects inflation expectations and the likelihood that the debt will be repaid.

Also, government bonds were usually referred to as risk-free bonds, because governments could easily devalue their currencies or raise taxes to redeem the bond at maturity. 



The Story of US Treasury Yields...
Just like Base-Lending-Rate (BLR) for Malaysia, everything from mortgages to corporate loans in US depends on US treasury yields. Higher yields mean higher borrowing costs. To stimulate the US economy, Federal Reserve had came out with various Quantitative Easing (QE) actions to bring down the said yields, allowing borrowers access to cheap funding. How to bring down yields? Federal Reserve will buy back US treasuries, thus, flooding the market with money. The side effect was a weakening USD.



However, all things will change 360 degree, if Federal Reserve start to slow down or totally stop their so called QE3. This is what happening now, creating uncertainties to global markets.

7 comments:

  1. This type of write-up may be mind-numbing. While as i are aware that examine, A lot of people once-in-a-lifetime.

    book publicity

    ReplyDelete
  2. I am Mr. Young Lee CEO of Young Lee Loan Firm, I am a registered loan lender that gives out loan at 3% interest rate, I give loan to individual and companies that are in need of a loan,
    Feel free to contact us for your loan today, we offer the below types of loan,
    Personal Loan
    Business Loan
    Student Loan
    Consolidation Loan
    You can contact us with our company

    email:youngleeloanfirm@yahoo.com.sg

    Mr.Young Lee
    Thank

    ReplyDelete
  3. My name is Mrs. Monica Roland. I live in UK London and i am a happy woman
    today? and i told my self that any lender that rescue my family from our
    poor situation, i will refer any person that is looking for loan to he gave
    me happiness to me and my family, i was in need of a loan of 25,000 pounds to
    start my life all over as i am a single mother with 3 kids I met the GOD
    fearing man loan lender that help me with a loan of 25,000 pounds,he is a GOD
    fearing man, if you are in need of loan and you

    ReplyDelete
  4. Dear Investors/Financial Seekers.


    We are a Registered Private Investors/Loan Lender! Do you need FINANCIAL ASSISTANCE? Are you in financial mess OR debts? We offer loan at 3% interest rate within 1 year to 30 years repayment duration period to Individual and Companies that are in need of financial assistance and to any part of the world.


    We give out loans ranging from $5,000.00 to $500,000,000.00, CURRENCIES: USD, CAD, KWD, OMR, SGD, RUB, GBP, AUD, MYR, ZAR, IDR, UAH, PHP, EURO.


    Our loans are well insured for maximum security is our priority, Are you losing sleep at night worrying how to get a legit loan lender? Are you in poverty? Do you need financial assistance to set-up a business? We can assist you financially. We'll help you get over those financial obstacles.


    Interested Individual OR Companies should contact us via:

    Email:{linpohloanfirm@yahoo.com.sg}

    Regards,

    Lin Poh Loan Firm Team.

    ReplyDelete
  5. Hello loan seeker!
    Are you facing any financial difficulties? Is your present situation not stable? Are you looking for a reliable source to get a loan with low interest rate? Then search no further because your problem is solved.
    Alberto Loan Finance is your answer for loans. Do you need financial assistance to make your business function well? Need a loan, personal, Business or Student loan? And you do not know which loan firm to trust, where and how to get a loan from. An International Loans Company is here to offer you loan with low cost interest rate that you cannot have elsewhere. Loan interest rate is 3.0%
    **********************************************************
    Email: albertoloaninvestment@aol.com

    ReplyDelete
  6. We offer our Loans to our clients In USD($), GBP(£) Euro(€) or ($) Singapore Dollars and in the following categories.

    Auto ,Mortgage ,Business ,Personal ,Real Estate Loan.

    Contact us today for easy loan with less stress. We give out loans at low and affordable interest rate... Why waste more time? Contact us ASAP so we can move on with your request.

    Contact us for more information with the Contact below,

    Loan Agent: Peter White


    Email: lim.koh56@yahoo.com

    Thank you for your response.

    Yours Faithfully,
    Mr. Lim Koh(C.E.O).

    ReplyDelete
  7. Good Day Customer's

    We are Loo Choon Loan Finance, We offer both Local and International Loans to serious individual or cooperate bodies that are in need of finance to set up a business or personal use. Our loan is 100% secured and guarantee without stress or delay, we offer all kinds of loans at a lower interest rate of 3% for the duration of 1 to 25 years with a 1 year grace period before starting the loan monthly installment repayment! Contact us today for any amount of loan: E-mail: { loochoonloanfinance@gmail.com }.

    ReplyDelete

Finance Malaysia Blog appreciates your comment. Cheers!

Related Posts Plugin for WordPress, Blogger...