Franklin Templeton loaded up on Irish bonds, reports NYT

A single investor has bought at least €2.5 billion in Irish government bonds, as well as €3 billion in Hungarian government bonds, according to a report in the New York Times yesterday. Mutual fund Franklin Templeton Investments started buying the bonds in the middle of last year and is currently sitting on potentially very significant gains on the Irish debt, which has rallied by more than 35% since then.

Franklin Templeton has bought up such a large volume of these bonds that market observers have begun to speculate that it itself may have contributed to moving the market tighter in these bonds, according to the article. The Hungarian bet is somewhat more precarious at the current time, with its bonds declining by around 8% since the middle of last year in the face of political and economic uncertainty in the country. The report identifies fund manager Michael Hasenstab as being the key driver behind these contrarian trades.