European Bond Yield Summary 7/16/12

Germany's Merkel is talking tough, the euro is weakening. The Germany 10-year yield continues lower now down to 1.25%. Portugal is up and over the 10.5% level again. Spain is moving up but remains under the 7% danger level.  Italy is bumping along sideways at 6 and change. The 10-year yields listed below from Belgium and lower all dropped a few basis points since Friday. The short-term yields for Germany remain negative for seven days in a row; investors continue to search for safe havens to place money. Thus, the yields for Germany, U.S., Finland and U.K. stay low (prices higher to meet demand). Note that Finland is now only one single basis point from the U.S. The search for safe havens continues to also fuel the dividend stock bubble and other high-yield instruments bubbles.

10-Year Yields:
Greece 24.90%
Portugal 10.52%
Spain 6.70%
Italy 6.04%
Belgium 2.65%
France 2.23%
Austria 2.01%
Netherlands 1.69%
U.K. 1.53%
Finland 1.49%
U.S. 1.48%
Germany 1.25%

Australia 2.81%
Japan 0.78%

Japan is now under 0.8%. Austria is about to drop under 2%. The France-Germany spread, the main gauge for the Euro debt crisis, is 98, under Keystone's 125 number that would signal danger for the entire Eurozone. Thus, some calm is in place for the last few days. The Spain bailout is targeted for approval on Friday after a German vote occurs on Thursday. Watch for any flies in the ointment as this week plays out.  The Spain-Germany spread is 545 well above Keystone's 520 number that indicates danger. Thus, despite Spain's 10-year yield dropping under 7%, the low German yield is maintaining a high spread between these two nations indicating continued tension. The Italy-Germany spread is 479, above Keystone's 470 danger level, so tension remains high here as well.