Tasos Vossos, Bloomberg News Skyscrapers in the skyline of the City of London, U.K., on Monday, March 8, 2021. Values in the U.K. capital should jump about 25% over the next five years, outpacing other European capitals, according to DWS researchers. Photographer: Jason Alden/Bloomberg , Bloomberg
(Bloomberg) Buyers of newly-minted corporate bonds are already nursing losses as inflation fears send government bond yields climbing.
About four fifths of high-grade non-financial corporate bonds priced in Europe this year are quoted below their issue price, based on data compiled by Bloomberg. Last Friday, the share of post-issue losers stood at under 50%.
This bleak statistic underscores the damaging effect on credit investors of the so-called reflation trade bets on rapid economic recovery and an associated pickup in inflation prompting many to seek shelter from further sovereign debt sell-offs.