the yield on three-year BTP down again and it is stated on a rate below 2%, the 1, 91% for the accuracy, such a low level not seen since 2005. However, the auction brought yesterday by the Ministry of Economy, there was a strong request . The same fate has befallen the year BTP, which currently has a gross rate of 4.06% , and the CTZ placed on the market at just 1 to 4%. Such a situation would appear to apparently inexplicable on the market are literally stealing headlines from the returns which, if not settle on the lows, however, you are approached. The answer
This strange phenomenon is the practice of "carry trade" : this is a speculative operation , widespread in the international finance, which is to borrow at interest rates very low and then invest in instruments with higher returns to pay back the debt at maturity, however, earning the difference.
fertile ground for this kind of operations, investors will find this very day when the ECB make a financing transaction than a year, putting on the market liquidity at a fixed rate of 1%. This explains why bonds with very low efficiency, however, have a high demand. In addition, according to market analysts, among the securities most investors require this kind of operation, there are just the Italian BTP.
More information on the topic: http://it.biz.yahoo.com/29092009/92/titoli-rendimento-dei-btp-triennali-scende-2-in-lieve-rialzo.html
This strange phenomenon is the practice of "carry trade" : this is a speculative operation , widespread in the international finance, which is to borrow at interest rates very low and then invest in instruments with higher returns to pay back the debt at maturity, however, earning the difference.
fertile ground for this kind of operations, investors will find this very day when the ECB make a financing transaction than a year, putting on the market liquidity at a fixed rate of 1%. This explains why bonds with very low efficiency, however, have a high demand. In addition, according to market analysts, among the securities most investors require this kind of operation, there are just the Italian BTP.
More information on the topic: http://it.biz.yahoo.com/29092009/92/titoli-rendimento-dei-btp-triennali-scende-2-in-lieve-rialzo.html
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