In amongst the equity market’s euphoria of the past few weeks that a solution might finally have been struck for the euro zone’s sovereign debt problem, bond investors have been distinctly less, how shall we put it, enthusiastic.
Only as equities’ sprint ground to a halt–Germany’s DAX was down around 1.5% on Monday morning having gained more than 25% from its September lows–did people generally start to notice that Europe’s bond investors not only didn’t participate in the general cheer, but have been growing downright gloomy.
For instance, yields on 10-year Italian bonds rose to their highest level, at 6.11%, since the European Central Bank started to buy sovereign debt back in August, with the unstated but pretty clear intention of putting a 6% cap on them.
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