European Woes

 

Not a good few days for Europe. S&P warned on Italy, Fitch downgraded Greece and said an extension of maturities would be considered a default. There were large protests in Spain and Iceland's Eyjafjallajökull volcano erupted.
From Bloomberg: Greece Readies Crisis-Fighting Steps

The cost to insure Greek debt against default rose to a record and the yield on its 10-year bonds increased to a euro- era high after Standard & Poor’s said May 20 it may cut Italy’s credit rating. That warning came hours after Fitch Ratings cut Greece three grades ... and said it would consider an extension of maturities as a default.
“Greece risks a sovereign default and finance ministers have expressed strong doubts about the sluggish progress,” French Finance Minister Christine Lagarde said in a May 20 interview with Austria’s Der Standard.

Naturally bond yields are rising for some countries - and falling in Germany and in the U.S. (flight to quality). Here is a table for some European bond yields via Bloomberg (ht Nemo for the links). The Greece 10-year bond yield is now over 17% (another new record).

Greece
2 Year
5 Year
10 Year

Portugal
2 Year
5 Year
10 Year

Ireland
2 Year
5 Year
10 Year

Spain
2 Year
5 Year
10 Year

Italy
2 Year
5 Year
10 Year

Belgium
2 Year
5 Year
10 Year

France
2 Year
5 Year
10 Year

Germany
2 Year
5 Year
10 Year

Weekend:
• Summary for Week Ending May 20th
• Schedule for Week of May 22nd

http://feedproxy.google.com/~r/CalculatedRisk/~3/oYPn4oi5s1o/european-woes.html