European Bond Yield Summary 4/23/13

The European bond yields continue to drop over the last couple weeks which hints at calmness returning to Europe, however, digging deeper, the likely reason is the shift in Japan's policies. The BOJ is determined to debase the yen and the easy money is chasing European bonds as well as U.S. dividend and perceived safe haven stocks. The rise in European bonds sends the yields lower. Italy is now down near 4% as the election drama continues to play out.

10-Year Bond Summary:
Greece 11.37%
Portugal 5.86%
Spain 4.49%
Italy 4.07%
Australia 3.13%
France 1.74%
U.S. 1.66%
U.K. 1.63%
Germany 1.23%
Japan 0.59%

Greece is now under 12%.  Portugal drops under 6%. Spain is now down at the 4.5% level. France is now well under 2% joining the perceived safe haven status with the U.S. and U.K.  The U.S drops to 1.66%, a level not seen since December of last year. Demand for Germany continues with the 10-year yield briefly losing the 1.20% level, a historic record low; the BOJ easy money is pumping the Euro bond markets. The U.S.-Gemany spread is 43 basis points down from the spread in the 50's only a week or so ago. Both U.S. and Germany yields are falling. Thus, some perceived calmness occurs in Europe, but, not for the right reasons; the lower yields are likely due to the Japan central banker intervention as well as a slowing global economy.