European Bond Yield Summary 4/4/12

10-Year Bond Yields:
Greece 21.27%
Portugal 11.87%
Hungary 8.86%
Spain 5.53%
Italy5.22%
Belgium 3.38%
France 2.93%
Netherlands 2.35%
U.S. 2.26%
U.K. 2.19%
Germany 1.82%

Greece continues printing new highs in yield day after day pointing the way towards more bailouts. Portugal is now within 13 basis points of the 12% level. Hungary dipped back below 9% but continues to show stress.  Spain has jumped 25 bips in the last 48 hours to now print over 5.5%. Italy is well above 5%. France is within seven bips of 3%.

For the safer haven countries, note that the U.S. yields are above the U.K. The U.K. was one of the few countries that produced an encouraging PMI on Monday so traders are preferring the U.K. debt over the U.S.  Perhaps China is cashing out of U.S. Treasuries and taking their money home.

The ECB Rate Decision and Press Conference is on tap over the next 3 or 4 hours. No change in rates is expected. The ECB only follows a single mandate of controlling inflation and considering that only about one-third of the LTRO easing can help the economy (about two-thirds is used to service debt), as well as the Fed steering away from further QE, for now, the ECB does not see inflation as a threat at this time.

France PMI is 50.1, a tiny single hair on the expansion side of 50, rather than contraction, not exactly a banner to wave.  Italy verifies the status of its sick economy with a PMI of 44.3 well into contraction mode as they deal with a mountain of debt.  Germany remains a brighter spot, however, with a PMI of 52.1. Portugal, Hungary, Spain and Italy remain the big worries.  Portugal 2's are at 10%, 5's are at 14%, 10's at near 12% and 30's at 10.17%.  The yield curve remains inverted from 5's thru 30's and the 2's are on the verge of moving back above the 30's.

Note Added 4/4/12 at 5:32 AM EST:  Spain 10-year tags 5.60% after bond auction. The Spanish yields are now at levels seen in January. CDS spreads are matching November numbers.

Note Added 4/4/12 at 7:20 AM EST:  Spain 10-year yield 5.68%, look at it go.