European bond rates are rising rapidly. Yesterday the rise spiked after Mario Draghi said the ECB was maintaining the key lending rate, and the overnight deposit rate. The ECB also cut its 2013 gross domestic product growth forecast to negative -0.6% from -0.5% as predicted in March, but boosted the 2014 outlook to 1.1% from 1%. Italian 10-year bond yields zoomed 23 basis points to 4.369%, Spanish 10-year bond yields rose by the same to 4.675%, and Portuguese 10-year yields climbed 24 basis points to 6.019%. Greek 10-year yields climbed 15 basis points to 9.271%.
What these reactions tell us is two things. First – as with the jittery stock movements and Bernanker QE exit hints – any sign at all that the Wily Coyote flying carpet is about to be pulled evoke dramatic pessimism. That’s because the markets know that this is just a game: they’ve known this for coming up to two years now.
Read the complete article at The Slog. 3-D bollocks deconstruction here.
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