The world’s biggest economies will need to refinance $7.43 trillion of sovereign debt in 2014 as bond yields begin to climb from record lows, threatening to raise borrowing costs while nations struggle to bring down elevated budget deficits.
European government bonds jumped, with yields from Ireland to Greece dropping to the lowest since at least 2010, as signs of the region’s economy is recovering helped spark a surge in demand for the securities.
Spanish and Italian government bonds advanced, with Spain’s two-year yield dropping to a record, as industry reports showing growth in euro-area manufacturing fueled speculation the region’s recovery is gaining momentum.
French President Francois Hollande is contending with a multitude of tax revolts, record-low popularity, an anemic economic recovery and a 16-year-high unemployment rate. You wouldn’t know it from the bond market.
Families holding historically large amounts of U.S. Treasuries are creating a potential price bubble as concern about a double-dip recession spurs demand for assets perceived to be safe, according to Credit Agricole CIB .