Yield curve weirdness
Yield curves have gone mad. Negative yields are everywhere, from AAA-rated government bonds to corporate junk . Most developed countries have inverted yield curves, and a fair few developing countries do too: (chart from worldgovernmentbonds.com) Negative yields and widespread yield curve inversion, particularly though not exclusively on safe assets. To (mis)quote a famous pink blog , this is nuts, but everyone is pretending there will be no crash. Here, for your enjoyment, is an à la carte selection of the most lunatic government yield curves. You can find lots more here . Exhibit 1: Switzerland. Negative yield already extends beyond 30 years, and markets are pricing in further interest rate cuts and/or QE, or indeed anything to stop the Swiss franc appreciating as scared investors pile into CHF-denominated assets. Hence the curve inversion. Exhibit 2: Denmark. Every Danish government bond currently circulating in the market is trading at a negative yield. And the in