US Treasury yields continue to firm this morning, now approaching 3.05%. As well spreads between “risky” sovereign debt, like that of Spain, and “riskless” debt, like that of Germany, has contracted sharply. Yesterday, Spanish yields were 215 bp above equivalent German yields. Today, they are down to 201 bp.
What does this all tell us? That risk is indeed back in fashion. Bring risky back!
