European Bond Yields 2/3/12

The European bond market continues to settle down in recent days.  The Italy 10-year moved as low as 5.55%, remaining under 6% for four days, with a fourth straight week of rises (bond price up yield down). Spain is on a two-week winning streak with yields remaining below 5%. The Greece talks continue along, each day a promise, but more confusion develops instead.  The Grece talks have become a joke, but unfortunately, none of this is a laughing matter.

10-Year Yeields:
Greece 34.07%
Portugal 14.44%
Hungary 8.79%
Italy 5.60%
Spain 4.93%
Belgium 3.47%
France 2.85%
U.K. 2.11%
Germany 1.84%
U.S. 1.82%

The 10-year Gilt is now at 2.11%.  U.S. 10-year yield is now a smidge under Germany showing money preferring both as a safe haven with a slight advantage to the U.S. Hungary yield moved lower 10 basis points over the last 24 hours. Perhaps the ECB saw trouble brewing and focused their bond buying approriately. The Portugal 2's, 5's and 10's are 17.91%, 19.10% and 14.44%, respectively, thus, inverted across the 5's and 10's.  Watch the 2's, the ECB was likely intervening with purchases to bring the 2-year yield lower, but the 2-year is an important indication moving forward.  Also, watch the following levels to indicate trouble afloat; 15% for Portugal, 8.9% for Hungary, 6% level for Italy, 5% for Spain and 3% for France. Keystone continues to suggest watching Hungary closely.

Eurozone retail sales data is weaker than expected this morning further validation of a European recession occurring. The big event today is the U.S. Monthly Jobs Report at 8:30 AM EST, less than three hours from now.

Note Added 2/4/12 at 8:46 AM: Hungary seeks 15-20 billion euro IMF/EU credit line as per Reuters News Service. We could see it coming.