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Euro Bond Yields and Spreads Exploding.

  • Written by Syndicated Publisher No Comments Comments
    November 6, 2011

    Following Threats of Troika Surveillance and Inspectors Headed to Italy to Verify the Italian Books it should be no surprise to find Italian bond spreads and yields surging to new highs.
    Italy 10-Year Government Bond Yield

    Italy 2-Year Government Bond Yield

    Germany 10-Year Government Bond Yield

    Germany 2-Year Government Bond Yield

    European Sovereign Debt Spread Table 10-Year Bonds

    Country 10-Yr Yield Spread vs. Germany
    Germany 1.82 0.00
    France 3.05 1.23
    Belgium 4.38 2.56
    Spain 5.58 3.76
    Italy 6.37 4.55
    Ireland 8.21 6.39
    Portugal 11.88 10.06
    Greece 26.77 24.95

    European Sovereign Debt Spread Table 2-Year Bonds

    Country 2-Yr Yield Spread vs. Germany
    Germany 0.40 0.00
    France 1.08 0.68
    Belgium 2.69 2.29
    Spain 4.25 3.85
    Italy 5.46 5.06
    Ireland 9.19 8.79
    Portugal 20.14 19.74
    Greece 97.97 97.57

    Inquiring minds might be interested in what European spreads look like over time. Chris Puplava at Financial Sense graciously put together a few charts at my suggestion that shows this action. Thanks Chris!

    10-Year Spreads vs. Germany Over Time

    click on chart for sharper image

    Recent Record Highs: Italy, Belgium, France

    1-Year Spreads vs. Germany Over Time

    click on chart for sharper image

    Recent Highs: Portugal, Italy, France, Belgium, Spain

    Note: Portugal does not have 1-year bonds. 2-year bond yield substituted

    10-Year Minus 2-Year Yields, by Country

    click on chart for sharper image

    That massive inversion in Portuguese bonds with the 10-Year bond yield at 11.88% and the 2-year bond yield at 20.14% is a sign Portugal may blow sky high any time. Ireland recovered from a similar setup, Portugal failed to do so.

    Mike “Mish” Shedlock


    From Mish’s Global Economic Trend Analysis: Italian Bond Yields and Spreads at Euro-Record High; Massive and Growing 2-10 Inversion a Sign of Pending Portuguese Implosion.

    Images: Flickr (licence attribution)

    About The Author

    Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.  Visit Sitka Pacific’s Account Management Page to learn more about wealth management and capital preservation strategies of Sitka Pacific.

    You are currently viewing my global economics blog which typically has commentary every day of the week. I am also a contributing “professor” on Minyanville, a community site focused on economic and financial education.  Every Thursday I do a podcast on HoweStreet and on an ad hoc basis contribute to many other sites.

    When not writing about stocks or the economy I spend a great deal of time on photography and in the garden. I have over 80 magazine and book cover credits. Some of my Wisconsin and gardening images can be seen at MichaelShedlock.com.