10-year spreads over the German benchmark offer another reason to worry.
- Greece asks for aid: 556 bps
- Ireland asks for aid: 527 bps
- Portugal asks for aid: 520 bps
- Current German/Italian spread: 555 bps (down from the high of 575 bps).
The reasons the be more optimistic: the margin hike and the likelihood of Italy passing austerity/Berlusconi stepping down
The reasons the be more pessimistic: spreads would be even wider if the ECB wasn’t buying.
