Every week we give you our summary of happenings in the bond market.
Our long-held view of unsustainable low developed market bond yields, received some attention last week as several central banks raised the issue of future policy normalisation. Although non-resident buying of local currency bonds lost a bit of momentum over the last month, the actual holding is still of frightening proportions. This is a very weak technical position should monetary policy normalisation become more broad based. The latest government finance data served as early confirmation of our tax revenue performance concerns and the negative impact on planned fiscal consolidation. Considering these risks, local bond yields are still too low.