It’s our view that the rise in yields around the world is the result of optimism over growth, and the waning desire to hold risk-light assets.
John Mauldin is of the view that it’s a bad signal, and he argues that investors are growing weary of sovereign debt, and as such.
In his latest letter he wrote: “Look at what is happening to German bonds, supposedly the safest in Europe. They are up about as much as their counterparts. “
And he published this chart:
Yes, yields have jumped… but let’s get a little perspective.
As this chart from @dutch_book makes pretty clear, spreads between periphery countries and Germany are still extremely wide (only France and the Netherlands have stayed in a tight bound).
Sure, Germany has some issues, and the euro could pose a threat to it ultimately. But there’s no big sign it’s happening yet.
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