Source: Bloomberg

Germany’s 10-year yield added 10 basis points as soon as the first-round French elections results came out and has done nothing since then. That’s a one-shot adjustment: the value of Bunds as a risk hedge against a prospective breakup of the European Community was worth precisely 10 basis points.

The European Central Bank meeting today will offer no news–with the second round of the French elections in progress, the ECB does not want to rock the boat.

Farther down the road, Germany’s national elections next September will come into play. Germans are savers, the Latins are spenders: the French and Italians like easy money and low rates and the Germans hate them. If Europe’s economic data continues, expect pressure for rates to go up starting at the June ECB meeting. We are better sellers of Bunds.