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This week's most overhyped finance news is about Germany's bond market

Here's a month's worth of interest rates on German 10-year bonds, from Bloomberg:

German bonds this year.


This spike has the financial press (Reuters / Bloomberg / NYT / FastFT) into a tizzy and has created a situation in which a person trying to make money day-trading in European sovereign debt markets could easily have lost himself a bundle (pro tip: don't try to do this), with potentially huge implications for various hedge fund positions and other wheeling and dealing.

But is it economically significant? I am skeptical. Per Ralph Atkins's explainer for the Financial Times, it's very unclear to well-informed people why this is happening. And if you zoom the chart out, this dramatic week of bond yields looks rather less interesting.

Here's a six-month view:

Six months of German bonds.


And here's a one-year view:

One year of German bonds.


And a five-year view:

Five years of German bonds.


Long story short, the interest rate paid by the German government on its debt is still freakishly low by historical standards. The fact that yields moved back to January 2015 levels so quickly is certainly interesting, but the current level the market is at is pretty dull. This would have to go quite a bit farther up to even reach what you would consider a normal level of interest for investors to charge a government to borrow money.

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