We can all be caught up in the mood of the moment, but talk of a “rout” in bond markets is, at best, premature. Yields are still remarkably low by past standards. While they may rise further, notably in the US, this should generally be in tandem with renewed economic strength. Central banks are also likely to tread very carefully to prevent a more damaging sell-off. Nonetheless, the recovery in the euro-zone does look more vulnerable than most, if recent market trends were to continue.
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