Archive: https://archive.is/UCOs6

Euro-area bond yields inevitably leapt like a salmon as Germany unleashed a fiscal bazooka, but compared to previous fixed-income tantrums, it’s not the stuff of all-night summits.

What’s key is what the bond rout isn’t; A reaction to fears that one or more countries is coming under financial stress. It’s a broad selloff that started in Germany and swept through the rest of the euro zone — and then spread to Asia — almost indiscriminately. It’s extraordinary for US yields to be lower when the entire euro yield curve has risen as much as 30 basis points. This is a genuine repricing to accommodate half a trillion euros of unexpected spending.