European bond markets show signs of stability

George Henderson, Manager of the Group’s Global Index Linked Fund, confirms that spreads on Italian 10 year bonds (over German bunds) have tightened 80 basis points and are now trading at 410bps over. The current absolute 10 year yield has breached the psychologically important 6% level to the downside. “In my view, positioning is having a larger effect on markets than fundamentals and we can see this through the reaction to auctions. Firstly, Spain auctioned 10% of its annual funding requirement earlier this month, meeting solid demand for its debt, while the following day an Italian au...