European Bond Yield Summary 3/18/13

Cyprus drama continues overnight. The bond markets are reacting in the correct directions although the moves are somewhat tame under the circumstances. Cyprus is a very small country and its contribution to European GDP is tiny. Therefore, world traders are measuring this against the troubling depositor confiscation. The worry is that contagion will spread across Europe with folks flocking to banks to take money out before their money is confiscated like Cyprus. For now, the markets in general are surprisingly steady.

10-Year Yield Summary:
Greece 11.24%
Portugal 6.20%
Spain 5.05%
Italy 4.70%
France 2.03%
U.S. 1.94%
U.K. 1.87%
Austria 1.69%
Netherlands 1.67%
Finland 1.59%
Germany 1.39%
Japan 0.60%

Greece is back up over 11%.  Portugal is back up over 6%.  Spain is back up over 5%. Both Spain and Italy jumped 14 basis point overnight and Germany has fallen 7 basis points. For the list above, all yields from France and lower have fallen overnight as money chases into perceived safer havens. A Cyprus parliament vote occurs in a few hours (10 AM EST) concerning the depositor confiscation. Folks do not appear to be lining up at ATM's across Cyprus, however, is that due to everyone knowing that funds are now frozen, or, are folks not worried or not concerned about losing their money? Watch to see how far Italy and Spain yields want to move higher, and Germany yield lower, to gauge the contagion, or lack thereof.

Note Added 3/18/13 at 6:38 AM:  The Cyprus parliament vote is cancelled. Further negotiations over the depositor confiscation are required. It also appears that banks will remain closed through tomorrow. The U.S. futures drop on the news.