Economics
It’s Brexit Politics, Not Economics, Threatening European Bonds
- Nordea says Dutch, Italian, Finnish bonds vulnerable to vote
- Irish opt to stay out of bond market to avoid U.K. risks
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Who potentially loses if the pollsters and bookmakers are wrong on Brexit? Add bondholders from Finland to Italy to the list.
Brexit could fuel the rise of “extreme political movements” and tap into simmering resentment toward the European project, according to Jan Von Gerich, chief strategist at Nordea Bank AB in Helsinki. In Italy, the extra yield on 10-year government bonds compared with German equivalents was 120 basis points on Tuesday. It would rise above 175 basis points after a Brexit vote, analysts at UBS Group AG said.