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The euro sign landmark is seen at the headquarters (R) of the European Central Bank (ECB) in Frankfurt September 2, 2013. The ECB council will hold its monthly meeting on Thursday, September 5. REUTERS/Kai Pfaffenbach (GERMANY - Tags: BUSINESS TPX IMAGES OF THE DAY)
Reuters/Kai Pfaffenbach
The world of European finance is topsy turvy right now.

Good news was bad bund news in European markets this week

Europe’s economy has been struggling to maintain decent economic growth, especially outside of Germany. The appearance of headline deflation stoked fears that the the European Central Bank’s bond-buying program wouldn’t be enough to breathe life into the Continent.

But then inflation rose to zero! That’s hardly the CPI reading of an economy on fire, but that and a few other data points were a nice signal that there’s a spark in there somewhere.

Previously, the consensus view on Europe was so cautious that investors were very nearly ready to swap US dollars for euros at par and pay Germany to hold their money for an entire decade (paywall). But then they saw the CPI reading and said “Never mind,” (paywall) driving the euro to its highest point against the dollar in weeks and selling so many 10-year bunds that the yield jumped to a whopping 37 basis points. Be careful out there, folks.

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