Italy 2s vs German 2s
The budget situation in Italy remains the acute troublespot in the eurozone. Late on Friday, Fitch lowered Italy's credit rating outlook to negative from stable. That's added pressure on Italian bonds.
So far, the problems aren't a major headwind for he euro. Comparing now to 2010/2011, shows how far away the market is from a true crisis.
That said, the rest of the developed world has improved tremendously since 2011 and the eurozone is sliding back into debt problems and there's no easy way out for Italy, where GDP still hasn't recovered from the crisis.
At the moment, Italian 2s are yielding while German 2s yield -0.61% while Italian 2s yield 1.49%, which is the highest since shortly after the election.
