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In reply to the discussion: Weekend Economists Hit the New Year (and it hits back) Goodbye 2013 / Hello 2014! [View all]xchrom
(108,903 posts)42. German Yields Climb Most Since 2006 as Euro Area Exits Recession
http://www.bloomberg.com/news/2014-01-01/german-yields-climb-most-since-2006-as-euro-area-exits-recession.html
German government bonds slumped last year, with 10-year yields rising the most since 2006, as the euro areas emergence from its longest recession on record damped demand for the regions safest assets.
Two-year notes dropped for the first time since 2007, with the rate rising from less than zero, as the threat of the 17-nation currency bloc splintering diminished. The economies of the countries that share the euro will expand 1 percent in 2014 and 1.4 percent in 2015, after contracting 0.4 percent in 2013, according to Bloomberg surveys of analysts. Bunds fell along with Treasuries as the Federal Reserve said it would reduce its $85 billion in monthly asset purchases.
Were optimistic the euro region is on slightly firmer ground, said John Wraith, fixed-income strategist at Bank of America Corp. in London. Yields have risen for positive reasons, not negative ones. Its about improving growth expectations and a diminished bid for core sovereign bonds.
The yield on German 10-year bunds climbed 61 basis points, or 0.61 percentage point, this year to 1.93 percent at the close of trading on Dec. 30. Thats the biggest increase since 2006, when yields jumped 64 basis points. The 10-year yield reached 2.09 percent in September, the highest since December 2011. The two-year rate rose 23 basis points to 0.21 percent, after being as low as minus 0.045 percent in May.
German government bonds slumped last year, with 10-year yields rising the most since 2006, as the euro areas emergence from its longest recession on record damped demand for the regions safest assets.
Two-year notes dropped for the first time since 2007, with the rate rising from less than zero, as the threat of the 17-nation currency bloc splintering diminished. The economies of the countries that share the euro will expand 1 percent in 2014 and 1.4 percent in 2015, after contracting 0.4 percent in 2013, according to Bloomberg surveys of analysts. Bunds fell along with Treasuries as the Federal Reserve said it would reduce its $85 billion in monthly asset purchases.
Were optimistic the euro region is on slightly firmer ground, said John Wraith, fixed-income strategist at Bank of America Corp. in London. Yields have risen for positive reasons, not negative ones. Its about improving growth expectations and a diminished bid for core sovereign bonds.
The yield on German 10-year bunds climbed 61 basis points, or 0.61 percentage point, this year to 1.93 percent at the close of trading on Dec. 30. Thats the biggest increase since 2006, when yields jumped 64 basis points. The 10-year yield reached 2.09 percent in September, the highest since December 2011. The two-year rate rose 23 basis points to 0.21 percent, after being as low as minus 0.045 percent in May.
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