The implied 10-year yield on Irish government bonds has fallen below two percent. And as can be seen in the table below the implied eight-year yield is less than one per cent.
The yield has been falling for the past while but the drop today is an acceleration of that.
It is hard to see how anyone would give money to the Irish government for eight years at a yield of less than one percent. Things are improving but risks remain. Of course, they are not really buying these on the basis that Ireland will repay the money; they are buying on the basis that Mario Draghi will step in to give them their money back. Draghi has had undoubted success in bringing government bond yields down. Is there any chance he could have similar success in bringing economic growth rates up?
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