Yield Curve

The yield curve shows the yield available on similar bonds with different maturity dates. The yield curve is often an upward sloping curve, which suggests that investors buying long dated fixed interest bonds expect a higher yield than for buying short dated bonds. This reflects the additional risks of such things as default or central bank interest rates changing over the longer period.

Yield curves can sometimes invert so that short dated bonds offer a higher yield than longer dated ones. This means that long dated bond prices are rising (and hence fixed interest yields falling), an indicator that investors are piling into long dated bonds, perhaps because of deflation worries.

What to do if you need more help

If you need more help with your specific commercial loan, mortgage or insurance requirement please speak to a professional financial adviser.

We hope you found this information useful.

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