German bond yields rise as eurozone bailout costs mount

German bond yields are climbing as European leaders consider increasing the €750bn rescue fund to help countries needing bailouts.

The chasm between two- and ten-year bunds, spanning the yield curve, has increased to more than 190bp, far wider than the average of 172bp in the second half of last year, Bloomberg reports. This rise in German yields is not dissimilar to what happened after reunification in the 1990s. The spread between two- and ten-year bunds expanded by more than 300bp in the six years following the fall of the Berlin Wall in 1989. Mohit Kumar, a fixed income strategist at Deutsche Bank, told Bloomberg: "One thing these two events have in common is that it is a case of stronger economies support...