Bond Spreads Weaken on Further Stimulus Talk

Bond Spreads Weaken on Further Stimulus Talk

I always love it when politicians make a bald lie and it is taken up by the press as the truth.

George Osborne’s statement about the lower income tax payers subsidising middle class child benefit is, so blatantly, not just wrong but the exact opposite of reality that I almost had a “Disgusted of Tunbridge Wells” moment.

Now the ‘spin’ is working overtime allowing that nice Mr Cameron to give a little bit back. Much more of this and the Tories will indeed be fighting the next election with no bedrock support at all.

The middle to top end earning range appears to be being asked to make all the sacrifices while government expenditure, and average public sector pay increases, continues to expand out of all proportion to reality.

Remember that in a period of apparent austerity August’s state spending was 11% higher than this time last year. Just taking everything back to 2009 would probably solve quite a few of our problems.

Fortunately none of the woes over state debt are impacting the spread betting markets at the moment as indications that Central Banks intend to be even more accommodative swept the news wires.

From Australia to Japan and across to the US the news was of lower than expected rate moves and talk of more fiscal stimuli.

The news took a bit of the shine off the Government Bond spread betting markets as investors seemed to ponder the possible increase in issuance over the coming years. However, with interest rates likely to remain ultra low for the foreseeable future virtually any reasonably quality rated paper is in demand.

The major bump on the highway remains the potential for inflation. It does seem strange to be talking about this when US inflation is at near half century lows but commodities are screaming higher and one would have thought that this will impact high street prices at some point.

The desperation to kick start the ‘old world’ economies may end up just creating the conditions for stagflation. For policy makers the other side of the coin is that if we slip into a double dip then the prospects of endemic deflation also rise considerably.

The tightrope of stability seems to get thinner and longer with every passing month.

Bond Spread Betting Markets - Companies Comparison


BOBL - Spread Size	2	2	2	2	3	2	2	3
BOBL - Min Stake	£1	€0.70	£2	£1	£1	£1	£1	£1
Bund - Spread Size	3	3	2	2	3	3	3	3
Bund - Min Stake	£1	€0.70	£2	£1	£1	£1	£1	£1
Gilt - Spread Size	3	-	2	2	3	3	3	3
Gilt - Min Stake	£1	-	£2	£1	£1	£1	£1	£1
Schatz - Spread Size	2	2	1	4	3	2	2	3
Schatz - Min Stake	£1	€0.70	£2	£1	£1	£1	£1	£1
US T Bond 10 Yr - Spread Size	4	3	4	4	6	4	4	6
US T Bond 10 Yr - Min Stake	£1	$1.10	£3	£1	£1	£1	£1	£1
US T Bond 30 Yr - Spread Size	6	3	-	4	6	6	6	6
US T Bond 30 Yr - Min Stake	£1	$1.10	-	£1	£1	£1	£1	£1

Comparison Notes.

Under no circumstances are the comments and the information provided herein to be considered an offer or solicitation to invest and nothing herein should be construed as investment advice.

Neither CleanFinancial.com nor Financial Spreads or any contributing author accept any responsibility for any use that may be made of the above or for the correctness or accuracy of the information provided.

Financial Spreads » "With FinancialSpreads.com you get all the advantages of
Spread Betting as well as commission free CFD Trading on 2,500+ markets, 24 hour trading, professional level charts and..." read Financial Spreads review.

Risk Warning: Spread betting and CFD trading carry a high level of risk to your capital and you may lose more than your initial investment. Spread betting and CFD trading may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary

Article provided / approved by Financial Spreads which is a trading name of London Capital Group Ltd which is authorised and regulated by the Financial Services Authority (FSA), FSA Register number 182110

'Bond Spreads Weaken on Further Stimulus Talk' edited by DB, updated 06-Oct-10

Related Articles:

Ladbrokes Financial Spreads, updated 17-Jun-10
Ladbrokes Financial Spreads offers investors a range of benefits including Free Guaranteed Stops, Spreads from as low as 1 point and the ability to buy and sell major financial markets, including stock market indices, equities, FX markets, commodities and...read article: Ladbrokes Financial Spreads.

ODL, updated 12-Oct-10
According to ODL, ''ODL Markets is powered by FXCM and only makes a profit from the spread. Our No Dealing Desk technology...read article: ODL.

The Gold Market in December 2010, updated 06-Dec-10
The two month highs of the US dollar have weighed on the price of gold. Despite the fact that gold prices usually rally in times of economic uncertainty, such as the...read article: The Gold Market in December 2010.

FTSE 100 Spread Betting and European Sovereign Debt, updated 01-Dec-10
The world stock markets and the euro have slumped on concerns that the European sovereign debt crisis will spread across the continent. Further clouding the...read article: FTSE 100 Spread Betting and European Sovereign Debt.

Korea, Ireland and the Spread Betting Markets, updated 23-Nov-10
Given their safe haven status, the dollar and gold markets have rallied a bit from the pre-news levels but it is unlikely that much more will happen unless...read article: Korea, Ireland and the Spread Betting Markets.

US Quantitative Easing and the Forex Spread Betting Markets, updated 22-Nov-10
Whilst the US Dollar will often benefit from turmoil in the markets the US Federal Reserve's second round of quantitative easing will most likely...read article: US Quantitative Easing and the Forex Spread Betting Markets.

Where Next for the UK and US Spread Betting Markets?, updated 19-Nov-10
Investors had few places to hide recently as commodities, bonds and stocks fell on fears that China may raise interest rates. However it's been a double dose of...read article: Where Next for the UK and US Spread Betting Markets?.

Up or Down for Spread Betting Indices?, updated 12-Nov-10
At the beginning of November 2010, in an attempt to boost the anaemic US economy, the US Federal Reserve announced that it would buy $600bn of government bonds by...read article: Up or Down for Spread Betting Indices?.

What's Affecting the Forex Spread Betting Markets?, updated 11-Nov-10
Whilst the dollar remains weak against the high-yielding and emerging market currencies, it has been looking stronger versus the euro and the yen after...read article: What's Affecting the Forex Spread Betting Markets?.

BoE Inflation Report Aids Sterling Spreads, updated 10-Nov-10
The fact that UK growth prospects are looking reasonable means that the BoE may well have to look at higher rates at the back end of 2011. As a result we a seeing a rise in Sterling...read article: BoE Inflation Report Aids Sterling Spreads.

First Page << 1 2 3 >> Last Page

Daily Spread Trading Index

Index of spread trading articles - the daily Spread Trading update from Financial Spreads, for more articles see the Spread Trading News Index.

Q) Average Trading Results?

A) Get free trading tips, offers, price updates, important news and more! All Free - Click here!

Risk Warning: Spread betting and CFD trading carry a high level of risk to your capital and you may lose more than your initial investment. Spread betting and CFD trading may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary.

The contents on CleanFinancial.com are for information purposes only and are not intended as a recommendation to trade. Nothing on this website should be construed as investment advice.

Neither CleanFinancial.com nor any contributing company/author accept any responsibility for any use that may be made of the above or for the correctness or accuracy of the information provided.

* Tax law is subject to change or may differ if you pay tax in a jurisdiction other than the UK.

1) Daily Trading Tips

2) Financial Tips

3) Financial Tipping