Spain 10-Year Government Bond Yield

Italy 10-Year Government Bond Yield

Germany 10-year Government Bond Yield

Where To From Here?

A one day rise in the yield of Spanish and Italian debt will not mean much if this is a consolidation following a big two-day drop.

However, the same can be said in reverse. If this is all or nearly all Spain and Italy get out of the summit, the Euro will have to be saved for the 20th if not 100th time.

Note that the latest summit changed no fundamentals (see EU Summit Winner Was Merkel).

Also note that Merkel’s hands may be heavily tied preventing further concessions from her (see Merkel Coalition About to Splinter Over Creation of “European Monster State”).

Thus, I suspect it will not be too long before yields head North in a major way. Don’t be surprised if today is the start.

Mike “Mish” Shedlock
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