Chart of the week: a tale of two century bonds

Investors keep buying Argentinian debt even though they really should know better. The price of Argentina’s century bond has slumped by 45% as concern over the latest debt crisis has grown. At the same time, Austria’s 100-year bond has surged this year.

Chart of Argentinian and Austrian century bond yields

This chart "illustrates several truths about the bond market", says Tracy Alloway on Bloomberg. Investors keep buying Argentinian debt even though they really should know better. The price of Argentina's century bond has slumped by 45% as concern over the latest debt crisis has grown. At the same time, Austria's 100-year bond has surged this year.

It's not that Austria has covered itself with glory lately; indeed, its governing coalition recently collapsed. But as yields on other, shorter-duration bonds slumped amid the latest bond rally, Austria's yield started to look relatively juicy. "Even if fundamentals matter, no investment stands out on its own. It's all relative to something else."

Viewpoint

David Rosenberg, Gluskin Sheff

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