The Bloomberg chart below illustrates the evolution of the U.S., French and German 10-year bond rate since January 2013. It highlights the acceleration of May, correlated with the equities market increase.
![](http://www.zonebourse.com/images/ckeditorimages/IMG_30052013_121627.png)
- Orange : 10-year OAT (France)
- White : 10-year T-Notes (USA)
- Yellow : 10-year Bund (Germany)
In addition, we note the global bond markets are less attractive for investors. Indeed, market operators are gradually moving away from bond markets to return to equities which offer higher returns. Equity markets evolve near historical highs, with a 25% increase in the United States and 65% in Japan since the beginning of the year. These arbitrages cause a surge in "Equities" (over-bought since early May) and a rise in interest rates (due to lower demand).
European economic and political decisions disappoint. Different investors anticipate a downgrade of sovereign debt, due to the confusion of european countries to respond to the recession and rising unemployment. Indeed, on Tuesday the 28th of May, Standard & Poor's has threatened, the grade of the French debt if authorities does not quickly take measures to reduce deficits. This might lead to a further downgrade in Europe
The current trend of rising interest rates should continue in order to achieve a normalization of levels.