German Bonds Begin to Lose Their Luster

“For months German government bonds, known as bunds, acted as a safe haven for investors, just like their U.S. brethren – Treasurys. But now bunds are starting to sag.

Ten-year bund yields have surged to 1.46 percent from a record low of 1.12 percent June 1. The 10-year Treasury yield hit an all-time low that same day – 1.44 percent. But it has risen more mildly, to 1.61 percent.

Bunds are suffering for several reasons, The Wall Street Journal reports. First, some investors worry that Germany’s financial health will be damaged by all the aid it must dole out to weaker European economies buffeted by the debt crisis.”

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