There hasn’t been much reason to talk about peripheral bond yields in Europe lately, and for good reason. Things have been very quiet.
Just a sample, here’s a look at the Spanish 10-year yield, via Bloomberg.
Borrowing costs remain elevated (Italy’s are nearly 100 basis points lower) but the story is that they fell sharply ever since the ECB sprung into action with its words alone, and haven’t really drifted much higher at all.
In other words, despite the fact that Spain has dithered about asking for aid (and might not do so at all for a long time) the potential of an ECB bond buying backstop is enough to keep things in check.