This Is The Chart We'll Be Watching Like A Hawk All Week

Blast from the past: About a month ago, on October 29, we declared that we were going to be watching the spread between Italian and German yields like a hawk.

What a difference a month makes. This week we’re less interested in that spread, and now we’re interested specifically in German bonds.

Last week was the week that an asset previously viewed as a pure safe-haven got to be viewed with some suspicion thanks to very mediocre demand at an auction. That focused everyone’s attention on the fact that bund yields have been rising for several days now, in contravention of the previous trend, whereby yields compressed whenever risk appetite fell.

So if you’re playing along with us, just use this link at Bloomberg and watch to see whether yields are rising or falling at times when things are selling off. If they’re rising alongside Italian, Spanish, and French yields… watch out.

Meanwhile, if you’re looking for other stuff to watch, PIMCO’s Mohamed El-Erian suggests that in addition to core yields, you should watch for yield curve inversion on the periphery, and any important policy.


Photo: Bloomberg


NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at