Increase in yields: The bond market is playing Biden's election victory

In recent weeks, Biden, the market for American state bonds in an election victory of Joe, the democratic presidential candidate, set. This has been observed on the long end of the yield curve: Since the beginning of August, the ten-year yield of American government bonds, the capital market referred to the most important securities in the world, according to the person in charge of the Finance Ministry as the Treasury, from 0.5 to more than 0.8 percent. Connected on bond market losses. Investors have bet that Biden, as the future President will implement an even bigger issue programme, which would lead to a higher supply of government bonds.

Markus Frühauf

editor in the economy.

In the same period, the rate of interest is distance to the ten-year Bund, the benchmark for the Euro area by one percentage point to more than 1.4 percentage points increase. In the past few days, as it has come in the Wake of the new Corona wave of Infection to a sell-off in the equity markets, has affected the market for U.S. government bonds barely out. The ten-year yield fluctuated around 0.82 percent, while the yield on German government bonds benefited due to the reallocation of shares in the bond market, which fell from minus 0.56 to minus 0.63 per cent.

Although has slowed the rise in Yields of Treasuries in the past few days something, but conversely it is not to win significant rate like other safe haven debt came. Investors expect due to the new escalation in the Corona-crisis, higher government spending and a continued high financing needs of the American state. This is the case regardless of whether Biden or incumbent Donald Trump wins the next Tuesday's elections.

Blackrock is skeptical

for this reason has promoted the American asset Manager Blackrock recently American Treasury bonds down. The chief investment strategist of Blackrock, Mike Pyle, expects a victory of the Democrats, and not just in the battle for the White house, but also in Congress. This was associated with a significant fiscal Expansion. The elections would bring the market to take into account the future risk of inflation rather.

Similarly, the DZ Bank-analyst Birgit Henseler said on Friday. How big is a new fiscal stimulus package will be and how quickly fiscal AIDS are adopted, is likely to depend, in your view, in particular from the Majority in Congress. The Democrats, led by Biden, are calling for a large fiscal stimulus package of more than $ 2 trillion. "Should not decide the Democrats in the majority in the house of representatives but also the Senate itself, could be made for more state aid quickly and in a large extent", expected Henseler.

Commerzbank rate strategist Christoph Rieger, the fiscal Outlook in the face of the rise in Yields is already priced in, but doubt that the new, second economic stimulus package can be adopted quickly. The new Congress don't step in front of the 3. January and Trump to stay on for the 20. January in the office. With views of the American Federal Reserve Bank (Fed) from Rieger that they expected to absorb additional bond issues "", because she has called for more fiscal support.