The BIG Sovereign Debt Structure cliff – Part 1

In yesterday’s article, “Where will all the new money come from?” we concluded the brief analysis with the Sovereign Debt Maturity profiles (otherwise known as the Debt Structure) of both the USA and Italy, noting how similar the two profiles looked at first glance.

Digging a bit deeper today, we would like to compare those charts to cliff edges. We trust that the sentiment of the article is that we perceive Central Banks across the globe fretting about the ‘New Money’ we were referring to.  With general economic confidence waning and the outlook for a sustainable long-term solution to sovereign over (indulgence) spending fading, the landscape is looking very bleak at moment.

New money will have to be printed (Quantitative Easing or QE) if investors in the capital markets cannot be found to bear the burden of purchasing new Bond and Treasury issues.

Some headlines over the few weeks alluded to Bond auctions in Portugal, Italy and Spain being well supported (see related article at the bottom of this post), but these were not major refunding and roll-over exercises.  Greece is continuing to be a welcome distraction for politicians and Central Bankers in both taking investor’s eye off the bigger problems coming along the line in Q2 2012 and in winning time to hopefully come up with a credible longer-term plan to reduce debt levels and then return to growth.

Auction Calendars

Let’s take a look at some of the crucial Sovereign Debt auctions coming up in the next few months:

The link below provides a time table schedule issued by the US Treasury for T-Bills, T-Notes, T-Bonds and TIPS, for at least the next six months.

US T-Bill Auctions schedule

To get the equivalent Eurozone calendar is not so easy. (Partly because each individual country issues Bonds, as there is no Central Eurozone issuer of Bonds, but at least a central purchaser, namely the ECB – European Central Bank)

We are currently investigating sources of information for Eurozone Sovereign Debt Bond auctions and will return to this theme in very near future.

theMarketSoul ©2012

Related articles

• Italian Debt Auction Sends Yields Tumbling: What Investors Need to Know (fool.com)
• Investors eye European bond auctions (bbc.co.uk)
• Successful debt auctions give boost to Spain and Italy (independent.co.uk)
• Italy borrowing rates drop again in bond auction (newsok.com)
• Italy sells more bonds as Greece struggles with debt (ctv.ca)
• Italian Debt Auction Sends Yields Tumbling: What Investors Need to Know (dailyfinance.com)
• Stock Market To Cast Confidence Vote On Eurozone Monday After Disastrous German Debt Auction (jhaines6.wordpress.com)
• Italy’s borrowing costs tumble after debt auction (guardian.co.uk)
• S&P cuts French rating to AA, hurting eurozone confidence (ctv.ca)
• Eurozone faces tough hurdles early in 2012 (sfgate.com)
• EU Faces Debt Hurdles Early in 2012 (abcnews.go.com)
• The road ahead for the struggling eurozone economy (oregonlive.com)
• Eurozone faces tough hurdles early in 2012 (seattletimes.nwsource.com)
• The eurozone’s borrowing costs may stay lethally high (bbc.co.uk)
• Buba’s Jens Weidmann Voted Against ECB’s Decision To Undermine The Sovereign Bond Market (zerohedge.com)
• Eurozone will pivot on Italy in 2012 (cbc.ca)
• Eurozone faces tough hurdles early in 2012 (ctv.ca)
• Stock Market Plunges On German Debt Concerns (huffingtonpost.com)