Watch This Space…

Because the eurozone is where the big bond bubble lives.

Though the euro periphery is now in Convergence 2.0 mode on hopes of eMac’s vision of a more integrated ‘zone, the German 10-year is at a critical level, and yields only 63 basis points in an economy that is probably growing close to 5 percent on a nominal annual basis.  It reflects a stunningly loose monetary policy and a central bank way behind the curve.

The repressed yield is technical as the German government’s new bond issuance is virtually nil as it runs a budget surplus and the dearth of bunds is exasperated by the ECB’s quantitative easing.  We have referenced this as a major factor of the “steel bubble” in asset prices,  the bursting of which is very stubborn.

A spike in bund yields could put further pressure on U.S. bond yields and may be the trigger for the long-awaited and ever fleeting equity market correction.  Maybe.

Stay tuned.

GermanBund_Jan28

This entry was posted in Bonds, Equities, German Bund, Uncategorized and tagged , , . Bookmark the permalink.

11 Responses to Watch This Space…

  1. Pingback: Watch This Space | peoples trust toronto

  2. Pingback: Watch This Space | Newzsentinel

  3. Pingback: Watch This Space | StockTalk Journal

  4. Pingback: Watch This Space – ProTradingResearch

  5. Pingback: Watch This Space – Independent News Media

  6. Pingback: Watch This Space – Wall Street Karma

  7. Pingback: Watch This Space – The Conservative Insider

  8. Pingback: Watch This Space | Economic Crisis Report

  9. Pingback: Watch This Space – binboom.net

  10. Pingback: Watch This Space – forexoperate.com

  11. Pingback: Watch This Space | Zero Hedge

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.