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Bond market information

There is a wealth of information specifically tailored to bond investing on this site. Here you will find booklets on investing in various types of bonds, information on pricing of bonds, tips on how to buy and sell bonds, links to other Internet sites where bond market information is available, and more. Consult your investment representative or tax advisor before making a specific investment. [Pg.156]

Central banks and market practitioners use interest rates prevailing in the government bond market to extract certain information, the most important of which is implied forward rates. These are an estimate of the market s expectations about the future directirMi of short-term interest rates. They are important because they signify the market s expectafirMis about the future path of interest rates however, they are also used in derivative pricing and to create synthetic bond prices from the extent of credit spreads of corporate bonds. [Pg.88]

Mark Klock and William F. Maxwell, Do Large Dividend Changes Convey Information or Appropriate Wealth Evidence from the Noninvestment Grade Bond Market (working paper, Texas Tech University, 2000). [Pg.33]

Available only to subscribers, the online version (http //www.wsj. com) offers the same daily credit market information as the print Journal, only with the added ease of clickability. The Markets Data Center offers information on bond indexes, bond yields, Dow Jones Bond Averages, Federal Reserve Data, money rates, and other information. For Wall Street Journal print subscribers, online access is available for a very reasonable 39. [Pg.79]

At Novartis, so-called BioavailabiUty Radar Plots [44] are used to visually display the oral absorption potential of molecules. On these plots five important calculated descriptors (log P, molecular weight, PSA, number of rotatable bonds and water solubility score [45]) are displayed on the axes of a pentagonal radar plot and compared with predefined property limits (green area) which were determined by the analysis of marketed oral drugs. These plots provide an intuitive tool that displays multiple parameters as a single chart in a straightforward but informative way, providing visual feedback about the molecule s bioavailabiUty potential (Fig. 5.5). [Pg.118]

One additional application of MV analysis is to use the technique to reengineer implied market returns. This requires the problem be reformulated to select a set of returns given asset weights, risk, and correlations. The weights are derived from current market capitalizations for equities, bonds, and other assets. The presumption is that today s market values reflect the collective portfolio optimizations of all investors. Thus, the set of returns that minimizes risk is the market s forecast of future expected returns. This information can be compared with the user s own views as a reliability check. If the user s views differ significantly, they may need to be modified. Otherwise the user can establish the portfolio positions reflecting his or her outlook under the premise his or her forecasts are superior. [Pg.767]

ITW Plexus specializes in the design and manufacture of sophisticated structural adhesives for the bonding of materials used in markets such as transportation, marine, wind energy, automotive, engineering and construction. For more information, visit www.itwplexus.eu. [Pg.22]

A credit default swap (CDS) price provides fundamental credit risk information of a specific reference entity or asset. As explained before, asset swaps are used to transform the cash flows of a corporate bond for interest rate hedging purpose. Since the asset swaps are priced at a spread over the interbank rate, the ASW spread is the credit risk of the same one. However, market evidence shows that credit default swaps trade at a different level to asset swaps due to technical... [Pg.7]

Traditionally, information on inflation expectations has been obtained by survey methods or theoretical methods. These have not proved reliable however, and were followed only because of the absence of an inflation-indexed futures market. Certain methods for assessing market inflation expectations are not analytically valid for example, the suggestion that the spread between short- and long-term bond yields cannot be taken to be a measure of inflation expectation, because there are other factors that drive this yield spread, and not just inflation risk premium. [Pg.117]

Using the prices of index-linked bonds, it is possible to estimate a term structure of real interest rates. The estimation of such a curve provides a real interest counterpart to the nominal term structure that was discussed in the previous chapters. More important it enables us to derive a real forward rate curve. This enables the real yield curve to be used as a somce of information on the market s view of expected future inflation. In the United Kingdom market, there are two factors that present problems for the estimation of the real term structure the first is the 8-month lag between the indexation uplift and the cash flow date, and the second is the fact that there are fewer index-linked bonds in issue, compared to the number of conventional bonds. The indexation lag means that in the absence of a measure of expected inflation, real bond yields are dependent to some extent on the assumed rate of future inflatiOTi. The second factor presents practical problems in curve estimation in December 1999 there were only 11 index-linked gilts in existence, and this is not sufficient for most models. Neither of these factors presents an insurmountable problem however, and it is stiU possible to estimate a real term structure. [Pg.123]

It is possible to infer market expectations about the level of real interest rates going forward by observing yields in government index-linked bonds, which trade in a number of countries including the US and UK. The market s view on the future level of interest rates may also be inferred from the shape and level of the current yield curve. Again from chapter 6, we saw that the slope of the yield curve also has an information content. There is more than one way to interpret any given slope however, and this debate is still open. [Pg.251]

The most reasonable way to measure bondholder value appears to look at the spread versus government bonds financial markets process information in a fast and anticipative way. Additionally, considering the spread to an index or benchmark bond representing the sector of the corporation allows to largely eliminate sector specific and general interest market related factors. [Pg.27]

Continuous financial communication can pay off if even in a difficult market environment stocks and bonds can be sold. Up to this point there is much scope for further improving the information flow from European companies to investors inclnding setting up a balance sheet according to international standards (e.g.. International Acconnting Standards). [Pg.36]

The nominal spread for the nongovernment bond is 148.09 basis points. Let s use the information presented in Exhibit 3.15. The second column in Exhibit 3.15 shows the cash flows for the 7%, 5-year nongovernment issue. The third column is a hypothetical benchmark spot rate curve that we will employ in this example. The goal is to determine the spread that, when added to all the Treasury spot rates, will produce a present value for the non-government bond equal to its market price of 101.9141. [Pg.79]

Besides this improvement in the information provided to the market, the above-mentioned increase in competition has made the Debt Agencies improve as much as possible the liquidity of their bonds. As we mention earlier, liquidity, and credit rating are the key drivers of the relative performance of Euro countries bonds and, therefore, the Debt Agencies will try to improve their bonds liquidity as much as possible to decrease their funding costs. In the primary market this increase in liquidity has been patent as explained below. [Pg.151]

The bid or offer from a dealer (depending on whether the customer wants to sell or buy bonds) is usually in competition with at least one other intermediary. The transaction is done on a price basis. This is usually straightforward. Disputes around prices are rare, since the spread is agreed, the price of the underlying government security is known from marketwide information screens, and the price calculation method is a matter of market practice. [Pg.185]

Intermediaries trade either with customers or with each other. In the latter case, trading is conducted via interdealer brokers (IDEs). Like all brokers, they match up buyers and sellers, but do not take positions themselves. They provide a useful service by allowing intermediaries to adjust their positions without revealing them to other professionals. In the absence of a centralized exchange, IDEs provide dealers with market color around flows of securities. Related to this, they also provide information to allow dealers to price less liquid bonds. [Pg.185]

These matching errors are less alarming than they might appear, because all known price information is built into the real yield formula as soon as it is published. Two things really matter, in terms of the achieved real yield relative to the quoted real yield at purchase firstly, the difference between future inflation over the life of the bond and the 3% inflation assumption used in the market convention for calculating yields, and secondly (as with any coupon bond) reinvestment risk. However, we are getting ahead of ourselves—the next section handles the market s yield conventions. [Pg.253]


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