European Bond Yield Summary 4/30/12

10-Year Yields:
Greece 20.33%
Portugal 10.53%
Hungary 7.98%
Spain 5.88%
Italy 5.63%
Belgium 3.33%
France 3.00%

Netherlands 2.26%
U.K. 2.11%
Finland 2.08%
U.S. 1.93%
Germany 1.67%

S&P rating agency downgrades 16 Spanish banks, not too surprising since this always occurs after the sovereign downgrade.  The more important news is Spain's GDP, negative for another quarter, now meeting the technical definition of recession of two consecutive quarters of negative growth. In fact, including the zero growth last summer, Spain has been sick for many months. Yields, however, are all behaving themselves as a new week of trading is underway.  Portugal is about 200 basis points under severe danger which surfaces at 12.50% and higher.  For Hungary, watch 8%.  Watch the 6% threshold for Spain and Italy. France continues to sit on the 3% level.

For the safer haven grouping, note that the Finland yield is now under the U.K. so traders perceive Finland to be a bit safer than the U.K. The U.S. and Germany remain under 2%.  Euro is weaker, dollar is higher so commodities and equities should feel pressure and the U.S. futures are slightly lower.  RBA (Australia) is set to cut rates by 25 basis points tomorrow morning (Eastern U.S.A. time) which should be priced into markets already.  A 50 bip cut would be a surprise which would cause commodities and equities markets to move higher. Japan and China markets are closed today for holiday.