Bloomberg: Europe is getting hurt by the effects of US bond hurricane
Bloomberg spoke about how Europe is receiving blows from the hurricane of US bonds, indicating that the world is directing more capital to the United States, and that this is bad news for the debt-laden governments of the European Union.
Bloomberg explained that European bond markets are approaching the fourth quarter of the year with faltering steps, and that although they recently achieved the highest 10-year rates over the past decade… with no clear domestic catalyst, this rise in yields is most likely the result of strong winds… It blows over the Atlantic Ocean, destroying everything in its path.
According to Bloomberg, “Although Italy and France announced some worrying budget deficit estimates, there is nothing new in the economic background of Europe, however, what is different now is the continued rise in US Treasury bond yields and the strength of the US dollar”.
The US dollar index has risen 6% against a basket of global currencies since mid-July, with 10-year US bond yields rising by 75 basis points during the same time.
Europe is powerless to resist these forces, especially with the price of crude oil uncomfortably close to $100.
A week ago, European stocks fell more than 1% at the close, amid a widespread selling wave under pressure from rising bond yields, with major central banks around the world hinting at keeping interest rates high for a longer period.
