What are the factors that affect bond prices? Bonds are the third largest financial investment mode besides stocks and futures. They are a more popular form of financial investment. However, investment has risks and there are many factors that affect the changes in bond prices.
- Economic situation: When the whole national economy is in recession, the demand for enterprise funds is weakened, bank loans are reduced, and market interest rates are lowered. As far as the general law of bond price determination is concerned, it is directly proportional to the interest income of bonds and inversely proportional to the market interest rate. Apart from the fact that financial institutions do not need to sell bonds and enterprises invest in short-term bonds, the bond market price will also rise at this time. On the contrary, when the whole national economy shows an expanding trend, the economy is prosperous and the demand for funds increases. On the one hand, enterprises throw away existing bonds, and on the other hand, they demand more loans. The interest rate will rise, and financial institutions will also sell bonds to increase loans. At this time, bonds are full of the market, and their prices will inevitably fall.
- Price:general price rise means inflation. At this time, the central bank will tighten monetary policy and raise interest rates. Social funds are generally short, and the market's expected yield will rise, forcing bond prices to fall; On the contrary, if the price level is stable, or even if it is stable, the monetary policy will be relaxed, the social capital will be abundant, the interest rate will fall, the market expected yield will fall, and the bond price will rise accordingly.
- Economic system: Under the dominance of a very underdeveloped planned economy system, the financial market has just started, the financial mechanism is not perfect, and the bond price is subject to various restrictions. As one of the typical financial products, the bond characteristics cannot be well presented, and the bond price changes slightly. Because many social, political and economic factors are difficult to reflect in the fluctuations of bond market prices; On the contrary, in an economic system with a developed commodity economy and a sound market economy system, the financial market is very developed and various financial mechanisms operate freely.
To sum up, the factors that affect bond price changes include economic situation, domestic prices, economic system, etc. In addition, there are many other factors that will affect the changes in bond prices. As investors can't analyze one by one, they need to rely on analysts' data to determine investment changes. In addition, they can visit Caijingz. com, which provides users with the most timely financial news 24 hours a day, including the latest domestic and international financial news, industry reports, strategic reports, institutional announcements, market research, private disclosure, etc, Caijing also has exclusive in-depth tracking reports on hot financial news and topics.
