by Calculated Risk on 11/25/2011 01:23:00 PM

Just a headline on Belgium ... I guess S&P noticed the Belgian bond yields are moving up sharply.

Also something we discussed this morning, from Bloomberg: Italian, Spanish Yield Curves Start Looking Greek: Euro Credit

Spain and Italy face paying more to borrow for two years than for a decade, echoing shifts that presaged bailouts in Greece and Portugal and suggesting skepticism about their new governments avoiding contagion.

The Italian 2 year yield is at 7.66%. And the ten year yield is at 7.26%.

But the Spanish curve is not inverted yet. The Spanish 2 year yield is at 6.09%, and the ten year yield is at 6.7%.

by Calculated Risk on 11/25/2011 09:13:00 AM

From the WSJ: Italian Yields Jump After Poor Auction

Italian two-year and five-year government-bond yields soared to euro-era highs Friday as investors began giving up on the euro zone's ability to break the political gridlock that is blocking a more decisive response to the currency bloc's debt crisis ... The Italian treasury sold €8 billion ($10.67 billion) of six-month treasury bills and €2 billion of 24-month zero-coupon bonds. The six-month paper carried an average yield of 6.5%, sharply up from the 3.5% rate paid at its October auction.

The Italian 2 year yield is up to 7.84%. Ouch. The 5 year yield is at 7.8%.

Note: I've added the table of links to European bond yields below the first post.

Update: From Reuters: Moody's cuts Hungary to "junk," government sees attack

Moody's lowered Hungary's sovereign rating by one notch to Ba1, just below investment grade, with a negative outlook, hours after rival Standard & Poor's held fire on a flagged downgrade after Budapest said it would seek international aid. ... It also came after [Prime Minister Viktor] Orban relaunched aid talks this week with the International Monetary Fund, a dramatic reversal after he cut cooperation with the Fund short last year after sweeping a 2010 election on a vow to regain "economic sovereignty."

by Calculated Risk on 11/24/2011 06:47:00 PM

NOTE: I've added a link below the first post for the table of links to European Bond Yields.

More on Europe ...

From the WSJ: ECB Considers Longer Bank Loans

The European Central Bank ... may extend loans to banks at maturities of two or three years, according to people familiar with the matter. The longest maturity at present is 13 months.

This would be for banks - with haircuts on collateral - and not countries.

From the Telegraph: Germany unmoved by French pleas for more ECB action

Ms Merkel instead used a three-way summit with France and Italy in Strasbourg to insist that new treaty powers to intervene and punish sinner states remained the key focus of Europe's rescue efforts. She said: "The countries who don't keep to the stability pact have to be punished – those who contravene it need to be penalised. We need to make sure this doesn't happen again."

Even suggestions that the ECB could extend longer loans to countries over a period of up to three years appeared to be ruled out. Ms Merkel said: "The ECB is independent, the modification of the treaty does not concern the ECB, which is dealing with monetary policy and financial stability. We are worried about a fiscal policy. It's a very different chapter. It has nothing to do with the European bank."

by Calculated Risk on 11/24/2011 03:31:00 PM

A few housekeeping notes for a holiday ...

• For anyone accessing Calculatedriskblog via an iPad, I'm trying out some new software with a customized tablet layout. The layout is from Onswipe. I'll be adding smart phone software soon ...

• Follow on Twitter.

• Receive blog posts via email. Sign up here for free (No subscription information will be sold or otherwise provided to third parties).

• Change to Graphs: If you click on a graph in a post, a larger image will appear (with thumbnails if there are multiple graphs in the post). This is very fast and does not use scripting.

For those looking for all current graphs, just click on "graph galleries" below the first post or in the menu bar.

The graph galleries are grouped by category:
* Employment Graphs
* New Home Sales
* Existing Home Sales
* House Price Graphs
* Mortgage Delinquency Graphs
* Retail Graphs
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* Manufacturing Graphs
* Commercial Real Estate
* Transportation Graphs
* Trade Graphs

Enjoy!

• And on European bond yields: Below is a table for several European bond yields (links to Bloomberg).

Check out the Belgian and Portuguese graphs. Ouch.

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

Thanks to all for reading. Have a great Thanksgiving!

by Calculated Risk on 11/24/2011 10:56:00 AM

From Bloomberg: Germany, France to Propose Treaty Adjustments on Fiscal Rules (ht Brian)

Germany and France said they will make proposals to amend European treaties in coming days to impose greater fiscal discipline on euro-area countries ...

The initiative announced today at a meeting in Strasbourg, France, involving German Chancellor Angela Merkel, French President Nicolas Sarkozy and Italian Prime Minister Mario Monti ...

The planned treaty changes prepared for a Dec. 9 European summit involve “the question of a fiscal union, that is a deepened political cooperation,” Merkel told reporters after the meeting over lunch. “It’s not about a quid pro quo. It’s about overcoming the defects in the euro zone’s construction, step by step.”

Merkel won backing on demanding changes to treaties as a prerequisite to discussing the issuance of common euro bonds.

From Bloomberg: Merkel Rejects Euro Bonds After Failed Auction ‘Wake-Up Call’

German Chancellor Angela Merkel again ruled out joint euro-area borrowing and an expanded role for the European Central Bank in fighting the debt crisis. ... Euro bonds are “not needed and not appropriate,” Merkel said today at a press conference

More from the WSJ: Leaders to Propose EU Treaty Changes