Wednesday, June 13, 2012

EU recap: Spain and Italy 10-year yields show no significant improvement!

Update 7:20 AM Thursday June 14: Overnight Moody's downgraded Spain sovereign debt to Baa3 stating that future downgrades into junk territory are possible. At the same time Spain's 10-year sovereign yield is currently 6.96% compared to the 6.75% when this article was written early Wednesday afternoon!
Update 3:49 PM Wednesday June 13: As if on cue, after this article was posted rating agency Egan-Jones cut its rating on the sovereign debt of Spain from B to CCC+!

Now that bailout funds for Spain's banks are apparently going to be provided, what impact has it had on investor opinion of Spanish sovereign debt?

The answer, as the chart shows, is not much! Adding to the turmoil is weakness in the sovereign debt of Italy along with the upcoming elections in Greece this Sunday.

Stay tuned!

Spain 10-year sovereign bond

Italy 10-year sovereign bond

Chart source: Bloomberg

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