Bonds take a tumble

The European Central Bank’s money-printing caused investors worried about deflation to rush into government bonds, pushing prices up and yields down.

742-bund-chart

By mid-April the yield on the ten-year bund reached a record low of 0.05%.Then, within three weeks, the yield soared more than tenfold as prices slumped. Early this week, the ten-year bund yield was trading just below 0.6%. That marked the biggest bund rout since 1994 in total-return terms. Yields in other European countries, as well as in the UK and America, have also leapt. So what's going on?

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