Traders are becoming increasingly selective after a sharp selloff in European government bonds, pulling money from countries viewed as fiscally vulnerable while seeking the relative safety of German debt, Reuters reported.
The shift is reshaping the hierarchy of European sovereign bonds. France has emerged as the main focus of selling pressure amid concerns over its large budget deficit and political uncertainty, while Italy remains vulnerable to contagion. Britain and Spain have so far avoided the worst of the market turmoil, while debt from Germany, the Netherlands, Switzerland and Sweden has benefited from demand for safer assets.
