Merkel sees German yields rising, crisis ebbs

German Chancellor Angela Merkel told lawmakers Tuesday that she expects German borrowing costs to rise as the debt crisis ebbs, and the Country's status as a safe-haven fades.

Ms. Merkel made her comments to lawmakers of her Christian Democratic Union at a regular meeting in parliament in Berlin Tuesday.

Yields on 10-yr German notes, known as Bunds, pared declines after her remarks were reported before resuming their fall.

The notes yielded 1.89% at 5 p in Berlin. That compares to as low as 1.67% in September when investors concerned that Greece was headed to default piled into debt of AAA rated Germany, Europe's biggest economy.

Ms. Merkel's prediction shows her increased sensitivity to markets due to the region's debt crisis now in its 3rd yr. Her Y 2010 demand that investors share the cost of bailouts deepened the turmoil as she fought what she called a kind of battle with investors.

She has since cited bond markets to help support her policy positions. Monday, she said yields in Spain and Portugal showed great sensitivity and fragility as she backed efforts to increase the financial firewall against the crisis.

Paul A. Ebeling, Jnr.

Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster's Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.

Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.