“It seems that the legacy of the events in the Eurozone five years ago, and Brexit last year, have played a meaningful role in influencing perceptions over the last twelve months.
“The economic reality is complex, but the recent divergence in bond yields seems to have been more related to these perceptions than underlying fundamentals.
“As such, an Italian 30 year bond yielding 3.2% or a Portuguese 30 year bond yielding 4.4% relatively to a German 30 year bonds yielding 0.9% looks more like an opportunity than a threat.”
