European Bond Yield Summary 3/30/12

Today is hte EOM and EOQ1, the last trading day of March and of the first quarter for 2012. Greece 10-year yield is at the highest levels at 21% since their latest bailout that was supposed to remedy the situation. Portugal is up another 10 basis points since yesterday to print 11.33% but about 100 bips under Monday's high at 12.50-ish; the ECB ovbviously intervening to keep the lid from blowing off the boiling pot.  Portugal yield curve remains inverted form the 5's thru the 30's.

Spain protests against austerity are turning violent. Spain 10-year yield is now approaching 5.5%, remember it was only 18 days ago that the yield was at 5% or less and eveyone was patting each other on the back telling one another how smart they all were.  Italy is up five bips in the last 24 hours to 5.15%, this was under 5% a week ago. Hungary is now over 9%, please ring a bell, or, since no one pays any attention to this nation in trouble, how about sounding a foghorn instead now that 9% is hit?

10-Year Yields:
Greece 20.91%
Portugal 11.33%
Hungary 9.01%
Spain 5.42%
Italy 5.15%
Belgium 3.42%
France 2.93%
Netherlands 2.38%
U.K. 2.17%
U.S. 2.15%
Germany 1.80%

France remains under 3% trying to stay with the cool kids in the perceived safer haven group. Germany now teasing another drop under 1.80% as money flocks to this strong economic nation for safety, moving prices up and yields down. This tells you that all is not well in Euroland.

Europe needs to boost firewalls to fight back the worries of contagion.  So far the temporary EFSF fund has provided about 200 billion euro's and the ESM about 500 billion euro's for a total of 700 billion. Discussions over the coming days will decide what to do with 140 billion euro's that are unused in the temporary EFSF since that fund should be phased out over time. If the EFSF is rolled into the ESM that would provide 940 bilion euro's that Europe can use at any time, there would no longer be a time limit of 2013 which applies to the funds from the EFSF.  The problem is, that even with 940 billion euro's, a failure of Italy and Sapin would require 1.2 trillion euro's or more, not to mention the ongoing needs of the existing nations in trouble; Greece, Portugal, Ireland.  The Euro woes are heating up again so use the blowout in yields as a gauge of ongoing contagion.

China PMI is released tonight and this number will have a huge impact on global markets as Q2 begins on Monday.   The data will impact copper and commodities markets which will ripple thru the U.S. equity markets come Monday morning.