Tags: Global | Debt | Bet | Greek

Best Global Debt Bet for 2012? Greek Bonds

Sunday, 30 Dec 2012 08:03 PM


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U.S. Treasurys gave up their first-place rank among world bonds in 2012 as signs of improvement in the world economy cut demand for the safety of U.S. debt, while analysts predicted employment and manufacturing gains this week.

Greek bonds doubled in price this year, making them the top performers among 144 debt indexes tracked by Bloomberg and the Federation of Financial Analysts Societies, accounting for changes in value and local currencies against the dollar. Treasurys ranked No. 132, with a 2.4 percent return. In 2011, an index of U.S. securities due in 10 years and longer surged 29 percent surge to rank No. 1.

“The U.S. economy is recovering,” said Park Sungjin, the head of asset management at Meritz Securities Co. in Seoul, which oversees the equivalent of $7 billion. “This is a good chance to set a short position,” or one that will benefit if bonds fall, he said.


Fiscal Cliff

Treasuries rose last week as U.S. lawmakers failed to reach agreement to avoid the so-called fiscal cliff of more than $600 billion in spending cuts and tax increases, boosting demand for the relative safety of U.S. securities.

Benchmark 10-year yields dropped six basis points, or 0.06 percentage point, to 1.70 percent last week, based on Bloomberg Bond Trader data. The price of the 1.625 percent security due in November 2022 advanced 18/32, or $5.63 per $1,000 face amount, to 99 9/32.

Senate Majority Leader Harry Reid said the chamber will resume work on the budget Monday.

The U.S. probably added 150,000 jobs in December, versus November’s 146,000 gain, according to a Bloomberg News survey of economists before the Labor Department reports the figure on Jan. 4. The jobless rate held at 7.7 percent, the least since 2008, the surveys showed.

An index of manufacturing climbed to 50.3 from 49.5, based on responses from economists before the Jan. 2 report. A reading of 50 marks the dividing line between expansion and contraction in the Institute for Supply Management’s gauge.

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