And Now—ITALY…Game Over
While analysts have been making a big deal about the bank bailout in Spain this morning, it is important not to forget about Europe’s next-biggest problem: Italy.
Yields on Italian government bonds are shooting through the roof today, as investors wonder how much stronger Italy’s banks are than Spain’s. In neither case, it would appear, to they believe that the bailout has divorced financial sector stress from that on the government.
The Italian FTSE MIB has also lost all its earlier gains, now down 0.6 percent today.
Check out Italian 10-year yields, up 23 bps so far today: