The honeymoon for European bond rates appears to be over for the Continent’s most-troubled economies. After more than a year of interest rates across the Continent moving lower in lockstep—regardless of the country—the last 24 hours show a breakdown in the relationship.
Investors are still pouring into German bunds, much as they are still moving into U.S. Treasurys. But they are selling Italian, Spanish, Portuguese and especially Greek debt.
Doug Rediker, CEO of International Capital Strategies, told CNBC that the differentiation represents “a more rational recognition of both credit risks and economic performance within the euro zone.”
Investors are once again differentiating between countries based on the ability of their economies to grow—and for their governments to eventually pay back their debts.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.