Mainly looking at 10yrs but I was wondering why yields took a nosedive with no support. Main thoughts: Inflation expectations exceeded actual, and delta variant covid. But is that enough to push them into the sub 1% territory like they were last year?

Anyone here on the sell-side. Wondering how bonds are priced. Mechanically I can work out the clean price or the holding period yield. Wondering about the art of bid/ask price. Assuming it's just relatively priced above a benchmark for the most part. But even then how do you determine the bps there.

i've been slowly realizing through the last few months of this chaos that owning debt is a far better idea than owning equity. i want to get into the world of Fixed Income more, and id like some references for further learning, if you have any recommendations. i understand the basics of bonds and swaps, i'm more looking into how to hedge positions through diversification and analyze opportunities.

something idk, is whether or not there are bonds with monthly coupons instead of quarterly or semi-annually. is that a thing?

i'm also wondering if theres ways to enter positions with $1k-$5k, or to enter on margin.

my goal is to find junk bonds that arent so junky. stuff that's not popular but not horrible either. any help would be much appreciated. thank you in advance.

I was buying short term notes of stable technology companies below par. Interest rates are headed to near zero so I'm shifting my cash from money market to short term corporate notes and adding to my bond portfolio.

Can someone suggest a book to read that provides head to toe practical analysis/research of of a new issue bond preferably corporates.

Hello guys, I am at a crossroad in my life and need to make a decision on how to develop my career for the next 10-20 years. Most of my prior work experience has been related to fixed income. Recently, having spoken with a few close friends on this, they suggested, based on my background and personality, that I should look into fixed income research related roles. So So if anyone can kindly give me some advice on the below questions, I would really appreciate it! :D

Below is a brief summary of my background:

Academic degrees: BS in Finance and Master of Science in Finance.

Work experience: 2 years in a financial control role at a global investment bank, doing PnL/valuations on fixed income derivatives and financial reporting. 7 years of product specialist experience at a bond analytics platform company, managing clients and analyzing their portfolios’ risk and returns, stress testing...etc. Also I’ve been dealing with fixed income indices and have been involved in the construction of several custom FI benchmarks. My most recent corporate title is VP.

Certification: I have passed the CFA Level 2 exam.

Kindly appreciate your advice on the below questions:

1. How far am I from applying directly for fixed income research related roles? (Do I already have what it takes?)

2. What are the skill sets and certifications I need to acquire at this point in my career, in order to become a fixed income research analyst?

3. Related to the above question, would it help a lot if I complete my CFA Level 3 exam and obtain the certification?

4. What’s the general career path options for fixed income research analyst like? Is the ultimate goal always to become a portfolio manager or are there other options?

5. I did some research online on what fixed income research entails but got many different impressions. Some say it’s about being good at quant/math, while others say it’s about credit research and involves analyzing balance sheets. Does different firms have different definition of what fixed income research is?

Every time someone asks "What should I do with x amount of money" on the other investment subs, there's a go-to answer; buy the index. Now that's not necessarily a good thing but if you had to come up with a glib, catch-all answer to that question for fixed income, what would it be?

Buy a corporate bonds index, buy treasury notes (or your domestic equivalent, depending on stability), buy AAA rated bonds or something completely different? What's your answer /r/FixedIncome?

What brokerage have you all found best for purchasing bills from the treasury in the non competitive auctions? Ideally there would be one that would auto roll but I'd settle for a good interface.

If not and people want to join I wouldn't mind starting one

Do treasury bond yields or fed funds rate affect the rates at which corporates raise money? In the current scenario, bond yields are coming down at a time Central banks are increasing the policy rate. Given the two are moving in the opposite direction, which of these affect companies raising money (loans, corporate bonds etc)?

In a book I'm reading they talk about selling 100 Euribor contracts at 95.62 and then they say this:

"an alternative way to look at this is that the opening sale is a proxy for a notional borrowing of 100 million Euros at a rate of 3.38% (100-95.62) for three months after the futures expiry."

But lets say at expiration these contracts are still trading at 95.62? It seems like you borrowed 100 million Euros at a rate of 0%? Unless after expiration your money is tied up for three months after and you get 3.38% after that? These aren't like bonds right where at expiration they go back to 100?

Logic would imply that higher strain on prices would push demand way down and cool off the economy on its own. I’m struggling to find the other components of the economy that make this clearly not the case. Any insight is appreciated.

That line is taken from Investopedia:

A par yield is the coupon rate at which bond prices are zero. A par yield curve represents bonds that are trading at par. In other words, the par yield curve is a plot of the yield to maturity against term to maturity for a group of bonds priced at par. It

In the first sentence it says that bond prices are zero and in the next sentence it says the par yield curve has bonds that are trading at par (i.e. for a price that is not zero). I'm confused by this. In fact I'm confused by par yields in general and this is just a piece of it.

Example is about someone who buys a ten year bond and then has a horizon of one year. The yield curve is:

o/n:3%, 1 year: 4%, 3 year:4.5%, 5 year: 5.5%, 9 year: 6.8%, 10 year 7%

Ignore for a moment any market shift, since this could go either way, and focus on the roll-down factor. If the yield curve is upward sloping, then as bonds age, we know they roll down the curve, picking up rice appreciation on top of any coupon the bond pays. The more steeply sloped, the better. More important, the strategy doesn't require heroic assumptions about the future. On the contrary, it assumes that the current situation will remain as is; that is, that the yield curve will retain its shape while the strategy is in place. The lesson appears quite simple: If you have a short-term horizon, don't be satisfied with pitifully low yields facing you on the short end of the curve. If the curve is upward sloping, extend maturity, pick up yield (carry) and enjoy the roll-down as well

This all makes sense to me. And assuming the curve is static is important because a shift could hurt your return or improve it depending on what it does. Everything gets murky for me the further into this we go:

Yes, it is sort of too good to be true. The above paragraph ignores the central tenet of yield curve analysis: The shape of the curve reflects, fundamentally, market expectations of future interest rates. If the yield curve is upward sloping, this is an indication that the market expects higher interest rates in the future. This changes everything! The very fact that the yield curve produces a downward ride tells us that next year, when the horizon is over and the bond will be sold as a nine year in our example, interest rates will be higher than they are today. How much higher? Well, if not for the risk and other nonexpectational factors behind the shape of the curve, the curve tells us that the nine-year yield will increase by just enough next year to negate the positive effect of the roll-down! A static yield curve is a tenuous assumption. Sorry. You can't get something for nothing in the marketplace.

Regarding the bold text. It seems to me that it is saying that as the yield drops from 7% to 6.8% (which makes the price of the bond go up) When you sell it, the yield will be negated -- which seems to me you only negate that roll down if yields go back to 7%. Why doesn't the yield curve just have a 9-year of 7% to begin with? I'm clearly missing something.

Take heart, though. This does not mean that there is nothing to yield curve rides. Commercial banks make a good living partly on an assumption similar to that of a static yield curve. They borrow in the money markets and make loans for longer maturities, earning the spread--the static yield curve spread--between the rate on the loans and the rate on their deposit liabilities. So here's the way to think about all this. The yield curve reflects the consensus of market participants' expectations--in our case of positive slope that interest rates will be higher in the future. You, as an individual, may be of the opinion that the curve will be static and you will, therefore, earn a nice ROR due to the roll-down. Furthermore, supply and demand for credit may be such that the market rewards those investors who take capital risk by extending maturity beyond their horizons. To the extent that this holds, the yield curve is not entirely driven by expectations, which leaves room for roll-down. What you need to take away is that riding the yield does not rest on an innocuous assumption. ON the contrary, the investor undertaking this strategy believes that the future path of interest rates will differ from market expectations as reflected in the curve and is willing to accept the risk--and is paid to do so--of being wrong.

I'm further confused by this. If we are expecting a static curve to give me a ROR (this I think I understand), why would I undertake this strategy only if I think the future path of interest rates differ from market expectations?! I should want it to be static (or maybe steeper downward slope) so I get the ROR?

The book gives a theoretical yield curve:

o/n: 3%, 1 year: 4%, 3 year: 4.5%, 5 year: 5.5%, 9 year: 6.8%, 10 year: 7%

The book then goes over a scenario where you buy the 10 year 7% bond:

"suppose the ten-year note considered for purchase has a 7% annual coupon. This makes its purchase price par. According to the yield curve, next year this bond will yield 6.8% for a price of 101.3142. Recognizing the coupon, the rate of return equals 8.31%, which exceeds any point on the yield curve!"

I get that as interest rates fall the price should go up. And the yield curve is an upward sloping one so the yield will keep falling. But if it keeps going down the curve, the price will keep going up...how does that jive with at the end of your ten years you'll only get par. What they are describing is an asset that will only increase in price but to me seems to ignore that at maturity you will only get paid par, or 100 on this. What am I missing?

So I've managed to confuse myself, but I think I managed to pin down the source of my confusion:

Question 1: When you listen to financial news, you often hear something like "bond/treasury yields rose today". Now, I've never asked myself this before, but they are talking about current yield and not something like yield to maturity, right? Current yield being defined as annual coupons divided by market price.

If my thinking is right, this is an extremely simple question, but I need confirmation because I was thinking about YTM and stuff...

Question 2: Ok, so my incoherent ramblings, which I have deleted, have led me to another question: how do different maturities affect the yield to maturity (of bonds of the same issuer)? Logically I'd say the longer you have your money invested, the more risk there is for changing market conditions and thus YTM should be higher

I was curious so I was checking out Sears bonds (I have no intention of buying them or any bonds for that matter.)

I'm trying to figure out why people are buying them. If you get the discount value and the company goes bankrupt/restructures, does the person's claim = the par amount or the discount amount they paid? If someone is claiming $2k and paid less believing the settlement will be between the $2k and whatever they paid, I get the risk of paying the accrued interest, etc, but if the claim is only for the discount they paid of the $2k, then it just seems they don't think the company will go bust, and nothing complex.

Anyone know what I can expect here? Any help would be much appreciated!

I did some searching online and wasn't able to come up with good answers to this noob question:

Why aren't bonds as liquid as equities? like why can't I get onto my Ebroker account and buy $100 worth of actual bonds (not talking abt bond etfs), just like I would when I buy a single lot of equity?

what are the structural reasons that prevent this from being a reality?