That’s helpful.
So is the rise indicative of Austrian bonds being preferred over German bonds? explainable as Germany is in the thick of bailing out other countries, maybe making Austria look like a safer place to stash money for a while.
Or is it the reverse? explainable as Austria’s banks getting shaky, and Germany emerging as the remaining economic stronghold.
Agreed on the irritations. Acronyms? At the start of the Cain accusations, the complaints were emerging from what was described as the NRA - which, if not further expanded, is assumed something very different from the National Restaurant Association. Charts not starting from zero? Like “global warming” temperature charts, depicting huge changes which are negligible on a longer scale. Could it have hurt the author to start this chart from 0, which wasn’t that much farther down the axis?
Higher interest means that investors perceive higher risk. So Austria looks more risky (due to banks’ exposure to some of the problem nations) right now than they did recently.
I don’t know that Germany really has anything to do with it, besides being the most stable “local” alternative and therefore something to measure against. They could have used the US, or a mix of other countries, or maybe some really big, really stable corporations (not banks, of course) that regularly finance operations through borrowing, and we’d probably see the same thing. It’s just easier to use Germany.
It is the reverse. Yields (i.e. interest rates) rise when the bond issuer is seen as increasingly likely to default.