We told you to watch the difference in yields on French 10-year bonds and German 10-year bunds yesterday.
That spread is up over 12% so far today (at 10:20 AM), to 163 basis points. Yields on French 10-year bonds have risen over 6%.
Meanwhile, the premium the Spanish and Italian governments have to pay on borrowing is falling today.
The premium on French borrowing is particularly worrisome because the European Central Bank cannot currently purchase French debt on the secondary market as it can PIIGS debt. But that’s just one of many reasons people are starting to flip over France.
Check out the French-German bonds-bunds spread: