Chart of French 30-year bonds’ spread to German debt over the last five years (via Reuters):
We think it’s a good chart… because it shows that investors really, really want Bunds, and this is why spreads even among the AAA members of the eurozone are moving out so much.
The 30-year German bond yield is close to a record low, around 2.48 per cent at pixel time. France might be able to borrow for 30 years at just 4.4 per cent (i.e. hardly a distressed credit)… but the days of convergence are long gone.
Whither the AAA bubble now?
(H/T Bond Vigilantes)
The Eurozone ‘Convergence Carry Unwind’ – FT Alphaville