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Updated 13:50 11/05/21

Volatility in the Sovereign debt markets

By Duncan Richardson, News Editor

09 Jun 2015

Government officials and financial regulators are becoming increasingly concerned about increased volatility in the government bond markets. In terms of size the world’s debts markets dwarf the value of the world’s stock markets.

Sovereign debt markets have experienced significant price volatility in recent weeks. The yield on 10 year German debt has risen from 0.05% in April to 0.88% yesturday Whilst yields on UK bonds have risen from 1.81% to 2.05% over the same time period. Debt is the foundation of our current financial system, including money itself and the world is swimming in a sea of debt. Are we starting to see credit markets revolting against an over leveraged system and the reality that bonds yields/prices are potentially in the biggest bubble in financial history.

Should rates rise governments, corporations and consumers would face higher debt repayments and many doubt if the world’s economy could continue to function.

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