It is noteworthy to observe how as U.S. high quality bond yields spike higher, sovereign bond yields are also pressing higher throughout the Eurozone. While this may not initially appear to be too surprising, the big difference between the U.S. and Eurozone situations is that as longer duration European yields grind higher, the shorter duration European note yields are moving deeper into negative nominal interest rate territory. Case-in-point: German sovereign 2-year note yields recently hit a new all-time low of -0.78% while the yield on the 10-year Bund has simultaneously reached a multi-month high of 0.35%. For comparison, the U.S. 10-year Treasury note currently yields 2.39% and the 2-year yields 1.11%.
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