European Bond Yields 1/23/12

The week begins with a look at the European bond yields.  The European banks continue to recover taking advantage of the LTRO while the yields listed below have calmed. Spain's economy is contracting with negative GDP's now expected into 2013.

The Greece negotiations continue with resolution promised but the talks are obviously in a snag.  The Greece economy is shrinking which is a dire backdrop for the talks.  There are many moving parts to the negotiations including whether or not CDS would trigger. A solution was promised a week ago. Talks broke off and then resumed on Wednesday, 1/18/12, with a promise for an agreement by Friday. Friday the negotiators announced that an agreement would be provided by Monday, today, now.  So we wait.

10-Year Yields:
Greece 33.55%
Portugal 14.28%
Italy 6.18%
Spain 5.47%
Belgium 4.10%
France 3.08%
U.K. 2.12%
U.S. 2.01%
Germany 1.91%

Portugal jumped large in yield last week and the media ignored it.  The 14.28% is about 30 basis point lower than late last week but remains elevated about 70 basis points from this time a week ago. For the most part, in general, the yields are moving sideways. Traders await the resolution on the Greece debt talks with bondholders.