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Bond Tab for Biggest Economies Seen Falling $220 Billion - Bloomberg

The world's leading economies will have $220 billion less sovereign debt to refinance in 2013, cutting supply after every major government bond market rallied for the first time since the 2008 financial crisis.

The amount of bills, notes and bonds coming due for the Group of Seven nations plus Brazil, Russia, India and China will drop to $7.38 trillion from $7.60 trillion in 2012, according to data compiled by Bloomberg. Japan, the U.K., Germany, France, Italy and Brazil will see a decline, while the U.S., Canada, Russia, India and China will face an increase.

While high debt loads are blamed for curbing global economic growth, bond investors are encouraged by signs that some nations are starting to rein in spending as they extend the average maturity of their obligations. Instead of rising, borrowing costs are falling as supply decreases, inflation remains in check and central banks from the U.S. to Europe cut interest rates to record lows.

"The progress made in fiscal adjustments has been quite significant in a number of countries, perhaps more than the market is realizing," said Mohit Kumar, the London-based head of European interest-rate strategy at Deutsche Bank AG, Germany's biggest bank. "Policy will remain accommodative. I don't expect to see a selloff in core government bonds. There will be enough demand."



The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman
by dvx (dvx.clt št gmail dotcom) on Wed Jan 2nd, 2013 at 02:11:13 PM EST
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