It makes total sense… The German economy is in great shape, it would seem, but the country is increasingly being expected to bear the debts of the rest of the Eurozone, just like everyone else in Europe, it can’t print its own currency. So it stands to reason that German bunds wouldn’t be the safe-haven everyone assumes them to be.
And that’s exactly what analysts at Nomura are pointing out, via FT Alphaville.
Whereas in the past bund yields traded inversely to the beta of periphery spreads, now they’re not.
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