NEW YORK, June 13 The value of negative-yielding
government bonds globally increased by nearly $1 trillion to
$9.5 trillion at the end of May from the beginning of March on
worries about the French presidential election and a weaker
dollar, Fitch Ratings said on Tuesday.
On March 1, there were $8.6 trillion of negative-yielding
The value of negative-yielding European and Japanese
government debt peaked at about $11.7 trillion last June,
according to the rating agency.
"Calming political fears related to the French election and
a weaker dollar spurred the increase in the total," Fitch said
in a statement.
Those fears had stemmed from whether anti-European Union
candidate Marine Le Pen would win the French presidency, pushing
up the yields on French government bonds.
But centrist Emmanuel Macron beat Le Pen in a run-off on May
7, reviving investor demand for French debt which sent some of
their yields back into negative territory.
On Sunday, his Republic on the Move (LREM) party scored well
in a first-round parliamentary election, putting it on track to
capture as many as three quarters of National Assembly seats on
June 28, according to pollsters.
The yield on five-year French government notes
was -0.255 percent on Monday, down near 1 basis point from
Friday. It reached 0.210 percent on March 24, which was the
highest since October 2015, Reuters data showed.
The amount of French negative-yielding sovereign debt
outstanding climbed to $1.0 trillion from about $750 billion on
March 1, Fitch said.
On the currency front, a weaker dollar contributed to a $400
billion increase in the value of negative yielding debt since
March 1, it said.
On May 31, the euro stood at $1.1241, stronger than
$1.0506 on March 1, while the dollar was at 110.75 yen,
weaker than 113.71 yen on March 1, according to Reuters data.
"Higher yields have alleviated some pressure for investors
but challenges remain, as yields in many developed economies are
still near historic lows," Fitch said.
(Reporting by Richard Leong; Editing by Frances Kerry)