Euro Crisis Far From Over as Spain and Italy Bond Yields Spike

By Rom Badilla, CFA, Bondsquawk

So much for the “breakthrough” European leaders negotiated at the EU summit last week as the European Debt Crisis continues to linger. Yields increased yet again for the peripherals. The yield on Spanish 10-Year notes spiked higher by 36 basis points to 6.77% while Italy’s longer maturity benchmark note is back up to 5.96%, a jump of 19 basis points (see figure 1).

The Euro was down a whopping 1.1% against the U.S. dollar and finished trading at 1.2391 after the Central Bank cut rates to 0.75 on concerns of recessionary pressures for the region.

U.S. Stocks continue to live in a vacuum as prices were down only slightly. The S&P 500 lost 0.5% from Tuesday’s close to 1,367.68.

(Figure 1 - Spain and Italy 10-Year Yields)

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