European Bond Yields 3/19/12

The Greece melodrama is settling down but eyes are already fixated on Portugal and Spain.

10-Year Yields:
Portugal 13.71%
Hungary 8.65%
Ireland 8.21%
Spain 5.01%
Italy 4.83%
Belgium 3.41%
France 2.89%
Netherlands 2.30%
U.K. 2.12%
U.S. 2.02%
Germany 1.78%

Portugal Yield Curve:
2-Year 12.48%
5-Year 16.66%
10-Year 13.71%
30-Year 10.84%

Portugal continues to flirt with 14% for the 10-year.  Spain is back above 5% but Italy remains under. Watch to see if Portugal moves above 14%, or if Spain moves above last week's high of about 5.20%, which will indicate high levels of stress and signal that all is not well in Euroland. The Portugal yield curve is inverted from the 5's thru the 30's so watch the behavior on the 2's moving forward. Inverted yield curves indicate recession. Money continues to support the perceived safer havens; Netherlands, U.K., U.S. and Germany. Markets breathe a sigh of relief as Greece is placed on the back burner, but, the situation for Europe remains analagous to a drowning victim bobbing up for another gasp of air, which helps in the short term, but the overall circumstances do not change and the path forward continues to appear uncertain and worrisome.