“There are increasing reports of money moving from the Southern European countries to the North. One simple way to monitor this is to look at the sovereign yields at the short end of the curve where money is usually parked. Could we increase the number of 3 month and 2 year sovereign yield charts to include many countries in both the North and South (Denmark, Finland, Germany, France etc and Spain Italy etc). Thank you very much.”

Eoin Treacy's view Thank you for these suggestions for additions to the Chart Library. I have added 2yr yield charts for Finland, Denmark and Sweden to the database. 3-month yield charts for the same sovereigns are not particularly helpful because they are simply not liquid enough. This page from Bloomberg lists Europe's various interest rate futures which represents the most liquid markets. We do not have either the Swedish or South African futures in the Chart Library because they are not liquid enough to construct usable charts. .

As a way of monitoring the spread trades between creditor and debtor nations within Europe it is generally most helpful to focus on the markets with the greatest liquidity because these reflect how the majority of traders are expressing their views.

The Spanish 2yr bond spread over the German Schatz remains close to its November peak near 500 basis points. It will need to break downwards from the current short-term range to suggest an improvement in risk perceptions. The Italian equivalent failed to hold the downward break last week and will need to sustain a move back below 260 basis points to suggest a declining risk premium.