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The Tell: Why selloff in German government bonds may be just about done

A selloff in German government bonds, and resulting spike in yields, over the last two weeks has taken investors by surprise. But a top bond strategist at one of Europe’s largest banks thinks it has just about run its course.

Luca Cazzulani, the deputy head of fixed-income strategy at Milan-based UniCredit, said Tuesday that several characteristics of the last major bear market in German bonds—which occurred in April 2015—are missing from the present selloff.

“We do not think a replay of April 2015 sell-off…is likely and expect stabilization or even some decline in yields in the very near term,” Cazzulani said in a note to clients published Tuesday.

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