Selected Global Bond Markets: A Desk Reference Tour

Fixed Income Trading and Risk Management by Alexander Düring (ISBN 9781119756354)

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The last numbered chapter is a field guide. Düring does not try to teach theory here. He gives tickers, conventions, and issuance quirks you would otherwise learn from six months of desk chatter.

Euro area: from national silos to one curve

Nineteen countries share the euro but brought legacy habits. Redenomination (labels in euros) was mostly symbolic; reconventioning to act/act and no minimum denominations mattered for cross-border trading. Banks reorganized from per-country desks to maturity buckets around 2001.

Lower rate volatility after EMU pushed sovereigns toward shorter average maturity, with swaps used to manage duration (France’s 2001 swap program moved French asset swap spreads instantly). Germany remains the benchmark (DBR/OBL, Eurex futures). France is innovative (OAT, OATi/OAT€i, first euro 50Y). Italy’s MTS platform dominates interdealer trading; BTPs semi-annual, heavy bill and floating CCT€ supply. Netherlands uses unique “Dutch Direct Auction” windows. Spain’s Eurex future never took off versus BTP/Bund hedges.

EuroMTS listing needs €5bn size, shaping how small sovereigns syndicate then tap. Greece post-PSI split between illiquid strip and newer GGBs.

Iceland

Tiny open economy: long debt mostly inflation-linked, short debt nominal. Break-even inflation analysis is awkward. Housing Financing Fund (Íbúðalánasjórður) dominates long end with CPI-linked annuities; state deficiency guarantee but not explicit sovereign debt.

Japan

Highest OECD debt load, aging population. JGB market huge in indices, underweight in foreign portfolios (low yields, weak yen policy). Simple yield quoting except JF/JGBi. Ex-coupon three-day rule with delayed settlement if coupon period hits.

Benchmark 10Y (JB) on Nikkei front page; reopen rules tie final size to yield path between auctions. JF (15Y float linked to 10Y auction yield minus alpha) ended 2008; coupon floor mattered at low rates. JGBi inflation-linked dormant until 2013 floor on principal. Bills (JTB) weekly, enormous size.

Sweden

Riksgälden since 1789, transparent data, compound yield quotes. SGB 10Y/25Y, SGBi linkers without always bond-specific base CPI. EUR fungibility clause on one eurobond if Sweden adopted euro.

United Kingdom

Continuous market history, funded pensions drive long end. Gilts (UKT conventional, UKTI linkers to RPI with lag). GEMM market makers, light touch on status. Semi-annual act/act, T+0/T+1. ICE 10Y future exists. Consols and war loan as vocabulary exports.

United States

Hamilton’s funding design still echoes. Treasury notes 2-3-5-10Y, bonds 30Y, TIPS, bills. On-the-run benchmarks dominate price discovery more than futures (though futures volumes grew). Primary dealers tied to Fed liquidity plumbing; PTFs and clearing spread activity. No decimalisation yet. Quarterly refunding sets supply size. Bills as shutdown/default sentiment gauge.

How to use this chapter

Chapter 39 is deliberately incomplete and will age (coupon steps, auction days, new linkers). The value is pattern recognition:

• Who publishes calendars vs who taps opaquely (Germany agency market management)
• Where futures set CTD engineering (OBL/BKO timing for Eurex)
• Where index investors distort basis (JGB futures richness)
• Where inflation structure is weird (Iceland)

If you trade globally, you do not need memorization. You need to know which convention will blow up your spreadsheet when you copy a German act/act position into a Italian semi-annual book without thinking.

That is what Düring delivers here: friction maps, not romance about sovereign credit.

Closing the book on markets

After thirty-eight chapters of mechanics, this one reminds you that implementation details are country-specific. The same duration hedge ratio means different things in Tokyo, London, and Frankfurt. Keep a cheat sheet for settlement lags, coupon frequencies, and benchmark instruments. When in doubt, read the sovereign’s auction calendar before you size a cross-market relative value trade.