Analysis of U.S. and Costa Rican Bonds

Aldesa recommends shortening durations, by selling long term Costa Rican bonds and buying short term securities.

Monday, March 15, 2010

Two factors are contributing to low prices in short term securities and higher prices for long term ones in the United States: low reference rates and high fiscal deficit.

Additionally, the yield difference between U.S. and emerging bonds market is at its lowest since the start of the of the financial crisis (2.72% now versus 8.91%).

Aldesa considers that this situation gives Costa Rican long term securities little margin to move up, with considerable risk of a drop in their price.

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