Da Bloomberg
Bond king Bill Gross says Europe is the place to look for opportunity. His assessment came in the aftermath of election results revealing a rightward lurch for the region’s voters, shaking up markets and sending French bond yields to their highest mark this year. “There’s coming a point where European bonds are more attractive than Treasury bonds,” said Gross, co-founder and former chief investment officer of Pacific Investment Management. “In terms of attraction, the German 10-year bunds and French 10-year, their spreads have narrowed significantly in the past month or two relative to Treasuries.” This weekend, two of Europe’s most influential leaders, France’s Emmanuel Macron and Germany’s Olaf Scholz, suffered surprise defeats in European Parliament elections—both coming at the hands of the far-right. Macron called a snap election. Traders pushed the yield on 10-year French bonds more than 12 basis points higher to 3.23%, the highest mark since November. German and Italian bonds similarly sold off on Monday. According to Gross, the earlier elections in Mexico, India and South Africa—where surprise results upended markets and torpedoed once-reliable macro trades—also offer a guide for how the looming US election may impact assets all over the globe. —David E. Rovella
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