Yields on Spanish and Italian bonds are tanking after some huge headlines about bank recapitalization in Europe.
This should come as no surprise considering the nature of debt support in Europe. Domestic banks in those two countries are the primary buyers of domestic government debt, and bank recapitalization will likely enable those firms to buy more bonds.
Check out Spanish 10-year yields to 6.57 per cent:
And Italian yields on bonds of the same maturity, down 28 basis points to under 6 per cent: