14th January 2021

Bonds are having a field day!

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Welcome to another edition of Under60 Daily - a brief rundown of the top happenings in the business world, compiled by hand to exclude the clutter and ensure you get up to speed in under a minute.

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[Sovereign Debt] Spain received more than €130 (~$158) billion of orders for its new 10-year bond. Spain’s yield spread relative to Germany’s yields (considered the safest EU debt) touched 0.55%, its lowest in 10 years. The demand for Spain’s risky debt was partly attributed to investor confidence as the European Central Bank increased its Quantitative Easing (QE) program to €1.85 (~$2.24) trillion. 

Over60: Reuters, What is Quantitative Easing?

[Airlines] Hungarian budget carrier Wizz Air has received relatively high demand for its debut bonds, even as the pandemic continues to tear through the airline industry. The company sold €500 (~$606) million three-year bonds at an interest rate of 1.35% against an order of €2 (~$2.42) billion. Rating agencies attached the lowest investment grade rating to the bonds and warn that the debt could slip into ‘junk’ status in the future. 

Over60: FT, Fitch Ratings, What Are Junk Bonds?

[Treasuries] Investors demonstrated unique sensitivity to fiscal policy measures rather than monetary policy moves regarding U.S. Government debt. The Democratic party’s victories in the Senate over the past few weeks has increased the likelihood that Joe Biden would increase fiscal stimulus to boost the economy. This increased inflation expectations, pushing 10-year bond yields to 1.17%, up from 0.91% at the start of 2021. 

Over60: FT

[Media] James Murdoch, the former CEO of 21st Century Fox and Uday Shankar, the former Chairman, and CEO of Star India and President of Walt Disney Asia Pacific, announced today that they are forming a new venture to explore technology and media opportunities in emerging markets.

Over60: FT

[Economy] The United States Labor Department announced that applications for unemployment benefits rose to 965,000 last week, indicating rising layoffs amid a surge in COVID-19 cases since the beginning of 2021. Jobless claims are now at their highest level since mid-August. 

Over60: WSJ, Yahoo Finance

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