6th Floor, Candlewick House
120 Cannon Street
London
EC4N 6AS
International Bond Research
Tuesday 21st October 2014
Netherlands
Data out from the Netherlands this morning, with house prices falling 0.2% from last month and consumer spending up 1.5%
(YoY), a sharp rise from +0.5% growth seen in September. Year on year, house prices have risen 1.7%, climbing from -9.8%
growth in June 2013 but ratings agency, Fitch, say they see stabilisation in the housing and mortgage markets ahead despite
only just recovering from a five year slump.
Dutch figures remain mixed; with unemployment having fallen from the year’s high of 8.8%, settling at 8% for the past two
months and inflation falling below 1% to 0.9%, following the Eurozone trend. This comes despite heavy investment in
technology and tourism in the country in aid to boost the economy. However, a recent report by a European think tank
indicates that Swiss and Dutch labour force participation rates remain the best within the OECD.
The housing market pick up appears to be at a moderate and sustainable pace, with the rapid rise in the housing market in the
early part of 2000 leading to the country’s recession. Despite Dutch homebuyers assuming debt, the country’s debt to GDP
ratio remains at the lower end amongst Eurozone countries, at 73.5% following public spending cuts. Whilst the economy has a
long way to go in regards to economic growth, measures that have been taken so far have been effective and these recent
figures indicate the economy remains on a positive path.
Dutch bond yields converge with German bunds at the long and short end of the curve, but Dutch yields remain higher
between the 5 to 15 years area. With higher yields than Germany and France, there appears to be further downsidein yield on
Dutch debt. We recommended buying Dutch debt in September, since which yields have fallen 10bp in the 10 years and 15
points in the 20 years, benefitting from the current economy stability. There appears to be further to go especially at curre nt
yield levels and safety provided.
German and Dutch yield spread
source: Bloomberg
Anasakti Thaker
D: 0207 398 3114
www.KingandShaxson.com
Page 1 of 3
INTERNATIONAL DESK
E: [email protected]
6th Floor, Candlewick House
120 Cannon Street
London
EC4N 6AS
International Bond Research
Tuesday 21st October 2014
INTERNATIONAL BOND COMPARISONS
yield (s/a)
yield change yield change return MTD
UK
US
Australia
Canada
Japan
Germany
France
Netherlands
Austria
Switzerland
Sweden
Denmark
Spain
Italy
New Zealand
Anasakti Thaker
D: 0207 398 3114
2 yr
5 yr
10 yr
30 yr
2 yr
3yr
5 yr
10 yr
30 yr
2 yr
5 yr
10 yr
2 yr
5 yr
10 yr
30 yr
2 yr
5 yr
10 yr
30 yr
2 yr
5 yr
10 yr
30 yr
2yr
5yr
10yr
30yr
1 yr
5 yr
10 yr
30 yr
2 yr
5 yr
10 yr
25 yr
2 yr
5 yr
10 yr
20yr
2 yr
5 yr
10 yr
26 yr
2 yr
5 yr
10 yr
26 yr
2 yr
5 yr
10 yr
28 yr
2 yr
5 yr
10 yr
30 yr
2 yr
5 yr
10 yr
UKT 4 09/2016
UKT 1.75 07/2019
UKT 2.75 09/2024
UKT 3.25 01/44
912828F47
912828F54
912828F39
912828D56
912810RH3
EC575249 Corp
EK3821791
EJ2445694
EK4387479
EK1739599
EJ7362241
EI7057215
EK5229738
EK4879822
EK4690054
EK4826393
EK4355757
EK4585510
EK4694379
EK0809500
EK1774786
EK3340909
EK3074136
EJ6098374
EJ4989046
EK4197019
EK1418137
EK0414632
EF3754068
EJ2583262
EK3001824
EG1036748
EC394599 Corp
ED4438336
EJ1752710
SWISS 2.5 3/36
EF0868820
EH0398089
EK0417692
EH7669102
EI5589029
EH6950768
EK2541788
EH6131138
EI7927748
EH8448167
EK3289700
ED7737726
EJ6263705
EK3526614
EK0933524
EJ6794667
EC935138
EJ6281665
EI7035203
0.66
1.45
2.15
2.89
0.35
0.77
1.41
2.19
2.97
2.55
2.86
3.31
0.96
1.40
1.94
2.52
0.02
0.13
0.48
1.63
-0.07
0.14
0.85
1.77
0.01
0.40
1.31
2.39
-0.03
0.31
1.03
1.82
-0.02
0.24
1.10
1.76
-0.07
0.07
0.43
0.95
0.02
0.33
1.21
1.21
-0.03
0.21
1.10
1.73
0.54
1.07
2.26
3.32
0.66
1.30
2.59
3.86
3.52
3.94
4.04
www.KingandShaxson.com
Page 2 of 3
on day %
-0.02
-0.03
-0.04
-0.02
-0.02
-0.02
-0.01
-0.00
-0.00
0.03
0.05
0.08
-0.01
-0.02
-0.01
0.00
0.01
-0.00
0.01
0.01
-0.01
-0.02
-0.01
-0.00
-0.01
-0.00
0.01
0.03
-0.00
-0.01
-0.00
0.00
-0.02
-0.02
-0.00
0.00
-0.00
-0.01
-0.02
-0.01
-0.01
-0.03
-0.02
-0.02
-0.01
-0.02
-0.01
-0.00
0.07
0.07
0.09
0.06
0.06
0.07
0.10
0.02
0.01
0.06
0.07
MTD %
-0.16
-0.32
-0.28
-0.17
-0.22
N/A
-0.35
-0.30
-0.23
-0.09
-0.14
-0.17
-0.17
-0.22
-0.21
-0.15
-0.06
-0.04
-0.04
0.03
0.02
-0.00
-0.10
-0.10
0.03
0.07
0.03
0.04
0.01
0.00
-0.05
-0.09
0.01
0.02
-0.05
-0.10
0.01
0.01
-0.04
-0.09
-0.13
-0.23
-0.27
-0.27
0.01
-0.02
-0.10
-0.12
0.22
0.18
0.12
0.11
0.31
0.28
0.26
0.22
-0.02
-0.12
-0.09
(local CCY)
3.17
2.86
4.55
5.75
0.83
N/A
3.08
4.57
7.12
4.52
2.92
3.82
1.17
2.44
3.72
5.39
0.19
0.36
0.81
0.83
-0.04
0.21
1.72
4.11
0.13
0.03
1.08
1.44
-0.02
0.18
1.91
3.80
2.78
1.28
1.67
3.87
1.43
1.93
1.25
3.21
2.37
3.71
4.39
4.39
1.76
2.64
2.35
4.34
2.54
2.00
1.00
1.28
1.19
-0.10
0.50
-0.99
4.66
3.18
4.64
Duration
1.81
4.53
8.63
19.00
1.93
2.95
4.75
8.78
19.65
2.17
4.70
8.39
2.01
4.66
8.54
15.00
1.97
4.88
9.48
20.29
1.90
4.94
9.38
22.81
2.08
5.02
9.22
20.54
1.48
5.20
8.93
22.53
1.86
4.47
9.32
16.05
1.95
4.29
9.12
14.55
1.69
4.03
9.39
17.68
1.99
4.58
10.03
17.04
1.91
4.49
8.85
15.00
1.53
4.61
8.39
15.70
0.48
5.08
6.97
INTERNATIONAL DESK
E: [email protected]
Tuesday 21st October 2014
sell
buy
10yr
GLOBAL
UK
US
Japan
Euro
10yr
DOLLAR
US
Australia
Canada
NZ
UK
-31
-64
-73
sell
US
112
-26
317
EUROPE
Belgium
Denmark
France
Switzerland
Austria
Italy
Netherlands
Spain
Sweden
Spread to Germany
2 yr
2
4
7
-1
4
73
4
61
9
US
-4
Japan
167
171
Euro
130
134
-2
Canada
26
-137
NZ
-185
-74
-211
-33
-42
Australia
-112
-137
97
256
10 yr
-6
25
46
-41
25
175
19
141
36
The information used here is obtained from sources that we consider to be reliable but its accuracy and completeness cannot be guaranteed. The
opinions and conclusions contained are those of King & Shaxson Limited. ("K&S"), and are subject to change without notice. No responsibility is taken
for any losses, including any consequential loss, which may be incurred by acting upon such recommendations or information.
Whilst all reasonable care has been taken to ensure that the facts stated herein are accurate and that the forecasts opinions and expectations
contained herein are fair and reasonable, neither the author nor K&S has verified the information contained herein and accordingly none of the author,
K&S nor any of their respective directors, officers or employees makes any representation or warranty, express or implied as to the accuracy or
completeness of the information or opinions contained herein and shall not be in any way responsible or liable for the contents hereof and no reliance
should be placed on the accuracy, fairness or completeness of the information contained in this document. No person accepts any liability whatsoever
for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection therewith. Nothing in this paragraph
shall exclude liability for any representations or warranties made fraudulently. The material does not attempt to describe all the economic, political,
competitive and other factors that underlie any estimates, forecasts, or opinions, or potential changes that could affect the assumptions on which these
estimates, forecasts and opinions are based. K&S makes no representation that the information is current. In particular, but without limiting the
preceding sentence, statements of fact or opinion regarding securities, investments, financial products, companies, markets, territories or particular
circumstances may not be up-to-date or may not represent the current opinion of K&S.
Any opinions, forecasts or estimates herein constitute a judgment as at the date of this report. There can be no assurance that future results or events
will be consistent with any such opinions, forecasts or estimates. This information is subject to change without notice. It may be incomplete or
condensed and it may not contain all material information concerning the Company.
This document does not constitute or form part of and should not be construed as any offer for sale or purchase of (or solicitation of or invitation to
make any offer to buy or sell) any securities nor shall it or any part of it form the basis of or be relied on in connection with any contract or commitment
whatsoever.
The information contained in this transmission is legally privileged and confidential information intended only for the use of the individual or entity
named above. If the reader of this message is not the intended recipient you are hereby notified that any dissemination, distribution or copy of this
facsimile or any parts of it is strictly prohibited. If you have received this facsimile in error, please notify us immediately by telephone +44 (0)20 7426
5950 and speak to Compliance).
King & Shaxson Limited Reg. No. 869780, member of the London Stock Exchange, King & Shaxson Capital Limited Reg. No. 2863591and King & Shaxson
Asset Management Limited Reg. No. 3870667. The Registered Office for all companies is 6th Floor, Candlewick House, 120 Cannon Street, London,
EC4N 6AS. All companies are registered in England and are part of the PhillipCapital Group.
King & Shaxson Capital Limited (FSA Reg. No. 169760), King & Shaxson Limited (FSA Reg. No. 179213), and King & Shaxson Asset Management Limited
(FSA Reg. No. 193698) are Authorised and Regulated by the Financial Services Authority, 25 The North Colonnade, Canary Wharf, London E14 5HS.
Anasakti Thaker
D: 0207 398 3114
www.KingandShaxson.com
Page 3 of 3
INTERNATIONAL DESK
E: [email protected]