European Bond Yields 1/26/12

Italy bond auctions went fine today. Portugal is finally received the attention it deserves by the global media. The Portugal bonds are reaching record highs since the inception of the euro. Fears grow that the Portugal situation is deteriorating and further bail-out measures are needed. The 10-year is hovering around 14.6%. Portugal's debt has been downgraded to junk status by Fitch, Moody's and S&P rating agencies. The consensus developing is that Portugal may not be able to avoid a default.  As eyes focus on the Greece talks, which now promise resolution by tomorrow, the 900-pound gorilla sitting on the sofa is actually Portugal. Watch to see if Portugal explodes up over 15% in the coming days.

10-Year Yields:
Greece 33.50%
Portugal 14.63%
Italy 6.14%
Spain 5.31%
Belgium 3.90%
France 3.13%
U.K. 2.14%
U.S. 1.97%
Germany 1.94%

Belgium is now 10 basis points under 4%. Italy, Spain and France are behaving themselves lately as Europe is experiencing a temporary calmness. Rates for the U.K., U.S. and Germany remain low showing that investors continue to view these countries as safer areas.