European Bond Yields 3/19/12

10-Year Yields:
Greece 18.09%
Portugal 13.52%
Hungary 8.61%
Spain 5.20%
Italy 4.82%
Australia 4.26%
Belgium 3.31%
France 3.01%
Netherlands 2.52%
U.K. 2.42%
U.S. 2.27%
Germany 2.02%
Japan 1.04%

Portugal, Hungary and Spain are the big worries moving forward.  Italy is under 5% for almost three weeks now so European leaders are slapping each other on the back telling each other how smart they all are.  LaGarde says to tone down the optimism, she is obviously concerned with the bullishness developing after handling Greece's latest debt problem (and there will be another in the future). Spain is up 20 basis points in the last week while Portugal and Hungary are moving flat.

The yields for the bond markets of the perceived safe haven countries are moving up, Germany now over 2% for the first time since mid-December. The U.S. yield has jumped 30 basis point in the last week and one-half as analysts rush to microphones to anounce the popping of the bond bubble.  Not so fast, that call may be very premature. Portugal yield curve remains inverted from the 5's thru the 30's indicating recession. In the land down under, Australia has jumped 34 basis points in the last week from under 4% to well over 4%. Watch Portugal, Hungary and Spain; also the 5% level for Italy.

For the equities markets, keep watching CBOE Skew as Keystone highlighted last week. Use the search box above by typing in 'Skew' to bring up the information.  Skew prints another uber high number at 138.43. Extreme caution is required moving forward.