Goldman Sachs says EU recovery fund proposal 'short-circuits' euro zone bond yields
Reuters
Published May 19, 2020 03:14AM ET
LONDON (Reuters) - The French and German proposed 500 billion euro ($547 billion) recovery fund will "short-circuit" euro zone government bond yields for now and spark a further fall in Italian and Spanish borrowing costs, Goldman Sachs (NYSE:GS) said on Tuesday.
The U.S. bank said in a research note that the gap between German and Italian 10-year government bond yields should narrow to below 180 basis points (DE10IT10=RR), levels that were last traded in March. The current spread is at 205 bps.
The difference between German and Spanish yields should drop to sub 90 basis points (DE10ES10=RR), Goldman Sachs said, from current levels of 121 bps.
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Written By: Reuters
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