Thursday, August 12, 2010

European Bond Spreads: Starting to rise again?

by Bill McBride on 8/12/2010 03:26:00 PM

Here is a look at European bond spreads from the Atlanta Fed weekly Financial Highlights released today (graph as of Aug 11th):

Euro Bond Spreads Click on graph for larger image in new window.

From the Atlanta Fed:

Peripheral European bond spreads (over German bonds) narrowed between the June and August FOMC meetings, though they were rising over the past week.

Between the June and August FOMC meetings, the 10-year Greece-to-German bond spread has narrowed by 50 basis points (bps) (from 8.01% to 7.51%) through August 10, though it has risen by 12 bps in the past week. Similarly, with other European peripherals’ spreads, Portugal’s is lower by 54 bps during the period, and Spain’s is lower by 37 bps, though both are up from the week prior.
As of today, the Greece-to-German spread has widened to 7.98% (peaked at over 8%) and the Ireland-to-German spread has increased to 2.88%.

Note: The Atlanta Fed data is a couple days old. Nemo has links to the current data on the sidebar of his site.