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Buoyant earnings depend on three things: low short-term interest rates (which trim banks' funding costs and encourage savers into higher-yielding securities), higher bond yields (so traders earn a spread on their funding costs) and a buoyant stockmarket (which encourages mergers and more investing).
This is not all due to higher bond yields.
The higher bond yields are, the more expensive it is to borrow money.
Although mortgage rates are rising, thanks to higher bond yields, housing remains affordable.
Germany enjoys historically low borrowing costs even as higher bond yields push the periphery towards insolvency.
And once capital could flow freely, ill-disciplined governments could be punished by higher bond yields.
Similar(21)
A higher bond yield makes bonds an attractive alternative to stocks, while higher interest rates tend to make corporations less profitable.
In some countries, high bond yields reflect high inflation rates.
Street violence, it claims, will send the country's already dangerously high bond yields soaring.
High bond yields have been a reaction to the underlying problem, not the cause of it.
When inflation was high, bond yields were higher than property yields.
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