Treasuries are rallying well off their lows with the 10 yr in particular now flat on the day and the 30 yr bond yield up just 4 bps. I haven’t seen anything new on the US debt ceiling to account for it and I believe its more in response to selling in European sovereign debt. The Italian 2 yr yield is up by 36 bps and back above 4% for the 1st time since last Tuesday and the Spanish 2 yr is also back above 4%. Italian bank stocks are also down sharply with Unicredit down by 6.4% and Intesa lower by 8%. Spanish banks also lower with STD and BBVA in particular lower by 4%.
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