European government bond markets are saying the euro crisis is pretty much over

James Marlay

Livewire Markets

European government bond markets are saying the euro crisis is pretty much over. Post GFC bond markets saw a violent separation in yields between core counties such as Germany and France from those on the periphery such as Portugal and Greece. However, since the turn of this year investors have been on a eurozone bond buying spree. Yesterday Spain set a record yesterday for the most orders ever submitted for a European government debt sale, €40 billion in orders chasing a €10 billion, 10-year issue. The last time the 10-year yield was this low, in 2006, Spain's unemployment rate was 8.5% (it is now 26.7%). In Ireland the five-year borrowing cost recently dipped below its American and British equivalents, to the lowest level recorded in the republic's 92-year history. So will the remaining gaps in bond yield eventually converge? Investors snapping up recently radioactive government bonds think so. (VIEW LINK)

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James Marlay
Co Founder
Livewire Markets

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