EURO ZONE GOVT YIELDS

 

While U.S. markets are showing relative strength versus Emerging Markets and Euro Zone, we are seeing different performances between the euro zone economies. Back door QE by the European Central Bank helped Spain and France but Portugal, Italy and Greece 10 Year Govt. yields are still at elevated levels. Germany having the best technical outlook is followed by France. With Spanish yields falling from 6.8 levels to 5.2 levels changed the its outlook to neutral but 5 level is an important support for Spain 10 year yields. Greece, Italy and Portugal are still showing weakness. Greece should move below 32, Italy below 6.5 and Portugal below 12 levels to reduce the pressure on the Euro Zone. Looks like so far ECB move had limited impact on the Euro Zone yields.