Rise in Eurozone Sovereign Yields Is More Good News Than Bad
(Bloomberg) -- Sovereign yields in the euro area have risen significantly over the last few weeks and contagion from the U.S. Treasury market is no longer to blame, according to research by Bloomberg Economics. Most of the increase in German borrowing costs reflects a pickup in domestic demand and expectations for that to continue -- that’s good news. Yet the rest of the news for the region is bad: Larger moves for the less-frugal members of the monetary union appear related to bondholders demanding additional compensation for the increased risk of a fiscal crisis -- an ominous development that’s likely to catch the eye of the European Central Bank.
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