Updated 9 November 2011
Money Morning gives you the latest on the eurozone crisis. This scary chart sums it up:
The yield on a country’s bonds shows how confident investors are that it’ll be able to repay its debts. The lower the yield, the more comfortable investors feel about lending, and vice versa.
This chart shows the spread between Italian and German ten-year bond yields. The higher the red line climbs, the more Italy must pay compared to Germany to borrow. So, that gap is a key measure of confidence in the country, and by extension, the eurozone.
This spread is now widening fast – Italy now has to pay about 5.5% more than Germany to fund its deficits. In other words, market confidence in Italy’s finances is collapsing.
Source: Bloomberg
For more, see our eurozone bond yield charts.
Category: Market updates