The president of the European Insurance and Retirement Pensions Authority (Eiopa), Petra Hielkema, has questioned the status as an active refuge of the US Treasury bonds for the volatility to which they are subjected. Last week they suffered a wave of sales due to the uncertainty of the commercial war.
This overwhelming assessment, expressed in a closed door, reflects part of the concern around the treasure bonds, considered for a long time as The “risk -free” asset worldwide and used as a guarantee in daily loans worth billions. Although there are no signs that European regulators are taking concrete measures for now, comments show how quickly the global perception of these assets has changed in just a few weeks.
The treasure bond market has experienced strong oscillations, and the profitability of the 10 -year bonus recorded the highest rise in two decades last week, in fear that generalized tariffs driven by President Donald Trump alter global trade and cause an economic recession. Given this scenario, investors have opted for alternative assets such as gold, German bonds (Bunds) and the euro.
According to Bloomberg, Hielkema also pointed out that The turbulence in the treasure bond market was probably behind the United States decision to suspend some of its tariffs. Last weekTrump suggested that the Pause was aimed at giving commercial partners an opportunity to reach agreements, although he also acknowledged that the bond market was being “very complicated.”
Hielkema warned that problems in less visible parts of the market could arise, such as those related to private coverage or credit funds. Companies that use non -sovereign values as a guarantee could face liquidity restrictions in the future.
Although regulators indicated that the markets worked properly at the moment, an increase in Margin Call was observed, increased guarantees on the depreciation of certain assets, for entities with prolonged exhibitions to derivatives on actions, as well as for firms that pay fixed types and receive variable types. Coverage funds have reduced their positions in high performance and private capital bonds.
According to the agency, the statement was made in a meeting with ministers of the European Union where it argued how to address Trump’s tariff war in the framework of the current negotiations, as well as the possible measures of retaliation in case the dialogues fail. However, the main concern of the meeting was the instability of the markets.
#financial #authorities #doubt #status #bond #active #refuge
