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The downgrade reflects "expectations that public finances will suffer in tandem with the expected decline in Spain's growth prospects, and that the policy response may be insufficient to effectively counter the related economic and fiscal challenges," said Trevor Cullinan, a Standard & Poor's credit analyst.
Others argue that investors' willingness to accept such low rates on safe assets reflects expectations of very weak growth.
Economists say growing optimism in the service sector reflects expectations for more consumer spending, which accounts for about 60percentt of Japan's gross domestic product.
Most of the increase this month reflects expectations of higher inflation, with conventional bond yields rising fast, but inflation-protected bonds less so.
"What's flowing into stores this spring and summer reflects expectations from nine months ago, which were not low enough," said Ms. Widlitz, who works for Pali Research in New York.
Plenty of commentators say this reflects expectations of stronger growth before long and thus of higher inflation.Corporate bonds with an investment grade tell a similar story, with yields rising over the past couple of weeks.
Similar(46)
But falling prices can also reflect expectations of economic weakness.
As with an individual stocks, it should reflect expectations of faster-than-normal profits growth.
That could help lower longer-term rates, as they partly reflect expectations of future short-term rates.
But the market price of carbon credits fell sharply immediately after the conference, reflecting expectations of weaker demand.
Bond prices fell yesterday on concern that yields did not reflect expectations that the Federal Reserve might raise interest rates again later this year.
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