A sell-off in French government bonds spread to broader Eurozone markets this month, luring big investors to 'bottom fish' among beaten-down assets including Italian bonds and corporate debt. The wave of selling pushed France's benchmark 10-year bond yield to its highest in almost a quarter of a century, at almost 5 per cent, as worries grow over the sustainability of the government's €3.5tn debt pile. The borrowing cost premium over 10-year German Bunds jumped to 1.4 percentage points, up roughly two-thirds from the start of the month.
Several big asset managers said they pounced on broader debt caught up in the sell-off, betting the region was unlikely to be heading for an economic blow-up similar to the Eurozone debt crisis more than a decade ago. 'This isn't a repeat of the early 2010s,' said Aberdeen Investments fund manager Alex Everett. 'Despite recent volatility, the European government bond market today benefits from materially stronger institutional backing and market confidence.'.
Source: Financial Times Companies · Summarized by HeadlinesBriefing