Savers have waited like ‘may water’ for the rise in interest rates. The expectation that banks would once again remunerate deposits has deflated as Christine Lagarde pulled the trigger on the rates that set the price of money in the euro zone. After fixed income suffered the worst year in its recent history, many investors have sought refuge in public debt as one of the few alternatives that currently offers interesting returns.
The Public Treasury auctions held in January are proof of this. Especially the letters, which leave the best paid deposits out of the game with a return that is close to 3% in the case of paper at nine and twelve months, while the letters at three months and six months offer interest of 2.1 % and 2.6%, respectively. These are unprecedented figures in the last decade that have led to an avalanche of demand.
This situation raises the question of whether the time is right to go to the next auctions, scheduled for February 7 and 14, or whether it is preferable to wait for Christine Lagarde to finish pulling the trigger on interest rates even more. The analysts consulted by this means agree that the market has already discounted the next movements foreseen by the European Central Bank (ECB), which includes, at least, another increase in addition to the one foreseen this Thursday. “We have to be very surprised by the decisions of his next meeting or his subsequent speech to significantly alter the current scenario”, precisely the CEO and manager of Buy & Hold fixed income, Rafael Valera.
3%, the threshold at which the rates are expected to be raised this Thursday. In this regard, he warns about the “limited effect” that the fact of acquiring them once the restrictive artillery has ended and defends that right now it is one of the few relevant options to invest together with monetary funds.
The awakening of interest rates during 2022 has triggered the yields of bonds both in the Old Continent and in the United States. In the case of Spain, the ten-year Spanish bond has gone from negative territory to 3% in just twelve months, with the corresponding fall in its price, since it moves inversely to the coupon yields.
Its jump to the aforementioned threshold occurred in October, when the rates in the euro zone stood at 2%, its highest level in fourteen years, a range that it consolidated after the last increase. In the days of the four interventions carried out from Frankfurt during 2022, the Spanish debt market has responded unevenly with aggressive movements. While in the first rise there was a drop of up to 9% in interest on the ten-year debt, after escalating progressively during the previous weeks, in line with that of October, in the other two, investors They responded with sales.
“The question will be in the message from the ECB and in the estimates that, based on this message, the market makes about the future of rates in Europe,” adds the director of Investments at Finaccess Value, David Ardura. This Wednesday, profitability already exceeded 3.3%, just two tenths below the 3.5% that it reached last December and which was close to 2014 highs. With inflation still above 8% in the currency zone Unique, the key will be in the tone of the ECB. “A bit more aggressive messaging could cause a lot of volatility in a fixed income that has started the year on a strong note,” he concludes.