European Bond Yields 12/19/11

As the week begins, Kim Jong-Il, North Korea's leader, was ill, and died. Asian markets sold off concerned over stability in the region. The Kospi took the biggest hit as would be expected so watch the reaction in the ship builders. The Europe problems persist and are the main driver of global markets.

European 10-Year Yields:
Greece 34.64%
Portugal 13.03%
Italy 6.89%
Spain 5.20%
Belgium 4.43%
France 3.16%
U.K. 2.08%
German 1.90%
U.S. 1.87%
Japan 0.97%

Germany and the U.S. rates are directly in line with each other. Germany was 30 to 40 bips higher only a week ago. Investors are moving money into the U.S., Germany and to some extent the U.K., perceiving these countries as safer havens. Italy is now only 10 bips away from hitting 7% again, which will ratchet up the Euro worry.  France ventured down to 3% late last week, even losing the 3% level briefly,but today is 20 bips higher than those levels. The S&P downgrade of France debt did not occur Friday night as many traders expected but the worries remain as shown by the move up in France yields. Italy and France are the two most important yields to watch; the Italy 7% threshold and the France 3.3%-ish level. Keep an ear out for any S&P news concerning a France downgrade which will significantly impact global markets.

Note Added 12/19/11 at 8 AM EST:  European bonds are receiving some buoyancy with price, yields lower.  Italy now at 6.77%, Spain at 5.12%, France at 3.11% and Germany 1.89%, now under the 1.90% level.