Which country has the largest bond market in the world?
Valued at over $51 trillion, the U.S. has the largest bond market globally. Government bonds made up the majority of its debt market, with over $26 trillion in securities outstanding. In 2022, the Federal government paid $534 billion in interest on this debt.
The US has the largest bond market in the world.
In 2022, the country that issued the highest value of sustainable bonds - either from the government or organizations domiciled in that country - was the United States, with over 104 billion U.S. dollars of fixed income debt issued.
This area of the market is mostly made up of governments, banks, and corporations. Banks are also key issuers in the bond market and they can range from local banks up to supranational banks such as the European Investment Bank, which issues debt in the bond market.
Bonds can be bought and sold in the “secondary market” after they are issued. While some bonds are traded publicly through exchanges, most trade over-the-counter between large broker-dealers acting on their clients' or their own behalf. A bond's price and yield determine its value in the secondary market.
Of the major developed economies, United States had the highest yield on 10-year government bonds at this time with 4.09 percent, while Switzerland had the lowest at 0.69 percent.
China's bond market is the second largest bond market worldwide, with depository balance over 150 trillion yuan, forming a market dominated by interbank and exchange markets and supplemented by the over-the-counter market. China Interbank Bond Market (CIBM) was established in 1997.
Nearly half of all US foreign-owned debt comes from five countries. All values are adjusted to 2023 dollars. As of January 2023, the five countries owning the most US debt are Japan ($1.1 trillion), China ($859 billion), the United Kingdom ($668 billion), Belgium ($331 billion), and Luxembourg ($318 billion).
- Japan. Japan held $1.15 trillion in Treasury securities as of January 2024, beating out China as the largest foreign holder of U.S. debt. ...
- China. China gets a lot of attention for holding a big chunk of the U.S. government's debt. ...
- The United Kingdom. ...
- Luxembourg. ...
- Canada.
Bonds issued by developed economies, such as Germany, Switzerland, or Canada, usually carry very high credit ratings. 12 They are considered extremely safe and offer relatively low yields.
Who is the king of the bond traders?
Bill Gross co-founded Pacific Investment Management Company, PIMCO, and is known as the "Bond King." He created the first investable market for fixed-income securities.
Issuance (as of March) $2,452.8 billion, +8.9% Y/Y. Trading (as of March) $1,254.4 billion, +11.8% Y/Y. Outstanding (as of 4Q21) $52.9 trillion, +5.5% Y/Y.
The Hydrogen bonds are the weakest as they aren't really bonds but just forces of attraction to the dipoles. On a hydrogen atom which are permanent and bonded to two atoms which are highly electronegative in nature. They are just electrostatic and not an actual physical bond which makes them very easy to simply bypass.
According to the Securities Industry and Financial Markets Association (SIFMA), the global bond market was worth $126.9 trillion at the end of 2021, compared to the $124.4 trillion global equity market cap. The gap between the two has likely widened in 2022 as stock prices have fallen.
In fact, the bond market actually has a much higher market capitalisation than that of the stock market.
What causes bond prices to fall? Bond prices move in inverse fashion to interest rates, reflecting an important bond investing consideration known as interest rate risk. If bond yields decline, the value of bonds already on the market move higher. If bond yields rise, existing bonds lose value.
Name | Ticker | Yield |
---|---|---|
Vanguard Short-Term Corporate Bond Index Fund | (NASDAQ:VSCSX) | 5.6% |
Guggenheim Total Return Bond Fund | (NASDAQ:GIBIX) | 5.5% |
Vanguard Total International Bond Index Fund | (NASDAQ:BNDX) | 3.4% |
Fidelity Short-Term Bond Fund | (NASDAQ:FSHBX) | 5.1% |
- Vanguard Total World Bond ETF (BNDW)
- Vanguard Core-Plus Bond ETF (VPLS)
- DoubleLine Commercial Real Estate ETF (DCRE)
- Global X 1-3 Month T-Bill ETF (CLIP)
- SPDR Portfolio Corporate Bond ETF (SPBO)
- JPMorgan Ultra-Short Income ETF (JPST)
- iShares 7-10 Year Treasury Bond ETF (IEF)
- iShares 10-20 Year Treasury Bond ETF (TLH)
Egyptian government bonds are one of the strongest performing investments of 2024, posting gains of 29%. Bond prices are rising on expectations that the country will receive $43 billion in foreign loans and investments, potentially offsetting dismal economic growth and the threat of spillover from the war in Gaza.
China focuses on export-led growth to help generate jobs. To keep its export prices low, China must keep the renminbi low compared to the U.S. dollar. U.S. debt to China comes in the form of U.S. Treasuries, largely due to their safety and stability.
How many US bonds does China own?
Foreign holders of United States treasury debt
Of the total held by foreign countries, Japan and Mainland China held the greatest portions, with China holding 797.7 billion U.S. dollars in U.S. securities. Other foreign holders included oil exporting countries and Caribbean banking centers.
If China “dumped” USA treasuries, they would take a serious monetary loss. The price of the treasuries would drop, effective raising the return for those who bought the bonds.
With $1.1 trillion in Treasury holdings, Japan is the largest foreign holder of U.S. debt. Japan surpassed China as the top holder in 2019 as China shed over $250 billion, or 30% of its holdings in four years.
1) Switzerland
Switzerland is a country that, in practically all economic and social metrics, is an example to follow. With a population of almost 9 million people, Switzerland has no natural resources of its own, no access to the sea, and virtually no public debt.
Top 10 territories that own the most U.S. debt
In total, other territories hold about $7.4 trillion in U.S. debt. Japan owns the most at $1.1 trillion, followed by China, with $859 billion, and the United Kingdom at $668 billion.
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