10-Year Yields:
Greece 29.18%
Portugal 10.61%
Spain 6.58%
Italy 6.09%
Belgium 3.10%
France 2.63%
Austria 2.32%
Netherlands 1.90%
Finland 1.71%
U.K. 1.68%
U.S. 1.61%
Germany 1.36%
The Spain yield is blowing out and creating contagion thru Italy. The Spain bailout positivity had the half life of a tsetse fly. Spain yield is 6.58% printing a high at 6.67% today, well over the 6.5% danger level. If the hope for the Spain bailout was to allow markets to limp into the Greece election weekend, the goal falls way short. Even more worrisome is the contagion risk, Italy is now over 6% and printed a high at 6.2% today. Germany yields remain low. Nothing has changed since last week and in fact the European debt crisis is worsening.
The Spain-Germany spread is 522 (464 yesterday) and the France-Germany spread, a guage for the Euro crisis, is 127 (117 yesterday). The blowouts in spreads clearly indicates the growing turmoil. A major problem is the lack of details for the Spain bailout. Traders still do not know if the funding comes from the ESM or EFSF, or what combination from both. Germany prefers the ESM since the fund has a preferred creditor mechanism that requires the ESM to be repaid first in the event of a default, before private investors are repaid. To pile on the bad news, Fitch rating agency downgrades two Spanish banks, BBVA and Banco Santander and warns that Spain will likely miss deficit goals. Cyprus is the next nation to ask for a bailout and will receive about 4 billion euro's once formally requested. European banks are selling off this morning. U.S. futures are higher; the S&P's up about 5 points.
Hi Keystone,
ReplyDeleteI have a question, are those 10 year yields change throughout the day? or announced once a day fixed number? I check a website http://www.tradingeconomics.com/bonds-list-by-country
the yields there is slightly different but I noticed the increase in spread too.
Thanks
Hello Serenay, yes, the yields move like any other instrument. You have to watch the news sources since many feeds are on delays of from 20 minutes to one-half hour or more unless you have a real-time feed. For the way they are used in analysis, it is not necessary to have the exact number at the exact time. We are simply watching the trend in yields, the general levels they are at, and the spreads they produce in relation to Germany. Bloomberg is a great source for yields, there are others, also the cable news channels if you can allow those to stream all day long since they will report current yields as well throughout the day.
ReplyDeleteThanks, I see the EU yields making news today.
ReplyDelete