Hedge funds help fill bond-buying void left by central banks – Reuters

Nov 15 (Reuters) – Hedge funds are helping to fill a bond-buying gap in European government bond markets left by central banks and playing an important role in boosting liquidity, debt agency chiefs from some of the region’s biggest issuers said on Wednesday.

The European Central Bank greatly reduced its bond-buying last year after a surge in inflation forced it to unwind a decade of stimulus policies. The Bank of England is also selling bonds.

Fixed income markets have been dominated by the question of who will step in to buy government bonds as bond supply rises to meet government debts accrued during the COVID-19 crisis and energy shock following last year’s Russian invasion of Ukraine.

“We have seen a rise of hedge fund activity, whic…

Read the full article at: https://www.reuters.com/markets/hedge-funds-help-fill-bond-buying-void-left-by-central-banks-2023-11-15/