1 Year Yields hit 9.95%….highest ever

Concerns are rising on the possible downgrade of Europe’s sovereign ratings. France did manage to hold a decent bond auction today.

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Japanese stocks fall early, with tech shares weak –@MarketWatch

One commentator thinks so

Power shift underway….

Rebels are said to have the power to drag the country into civil war. It is not clear if international help will be needed.

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“European governments have agreed in principle to ban imports of Iranian oil, EU diplomats said Wednesday, dealing a potentially heavy blow to Tehran just months before an Iranian election.

“A lot of progress has been made,” one EU diplomat said, speaking on condition of anonymity. “The principle of an oil embargo is agreed. It is not being debated anymore.”

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Some things to pay attention too

This is the widest spread since November….when everyone was freaking out about yields.

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Many tools left in the box for them to continue a “Sully” style landing of their economy…

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“FRANKFURT—Banks’ deposits at the European Central Bank’s overnight facility reached a new all-time high Tuesday, while borrowing from the overnight lending facility marginally increased compared with Monday.

Banks parked €453.18 billion ($591 billion) in the ECB’s overnight deposit facility, which pays a 0.25% interest rate, up from €446.26 billion Monday, ECB data showed Wednesday. That breaks the all-time record set last week of €452.03 billion.”

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Gilts happened to be the best performing government bond posting a 17% gain last year.

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“Euro-region inflation (ECCPEMUY) slowed for the first time in five months in December, giving the European Central Bank room to lower borrowing costs further as the economy edges toward a recession.

The inflation rate (ECCPEMUY) in the 17-nation euro area fell to 2.8 percent from 3 percent in November, the European Union’s statistics office in Luxembourg said in an initial estimate today. Euro-area services and manufacturing output contracted less than initially estimated last month and French consumer spending unexpectedly declined in November from October, separate reports showed.”

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BRIC PMI data has come in better than expected suggesting that a downturn may be stabilizing…

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FUELING ANGER: One man was killed at a demonstration protesting spiraling fuel prices in Nigeria amid signs of growing unrest over the government’s hugely unpopular decision to end a subsidy program that kept gas costs down for more than 20 years. The government says it will use $8 billion in savings to make much-needed infrastructure improvements.

PUMPED UP PRICES: Gas pump prices have more than doubled, to about $3.50 a gallon. In Nigeria gasoline is used not only to fuel cars, but to run generators that keep many businesses operating in a country with frequent power blackouts.

LOTS OF OIL, LOTS OF IMPORTS: Nigeria, an OPEC member nation producing about 2.4 million barrels of crude oil a day, is a top supplier to the U.S. virtually all of its petroleum products are imported after years of graft, mismanagement and violence at its refineries.

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MIXED EMPLOYMENT REPORT: Germany’s unemployment rate edged higher in December, but the average number of people unemployed last year in Europe’s biggest economy was the lowest for two decades.

THE MONTHLY DETAILS: The government said Tuesday that the unadjusted jobless rate rose to 6.6 percent last month from 6.4 percent in November. But the seasonally adjusted jobless rate dipped to 6.8 percent from 6.9 percent a month earlier.

THE ANNUAL RESULTS: The number of people out of work averaged 2.976 million for the full year, 263,000 fewer than in 2010 and the lowest overall figure since 1991. Last year’s average jobless rate was 7.1 percent, down from 7.7 percent in 2010. Andreas Rees, an economist at UniCredit in Munich, said the German labor market still has “substantial” momentum.

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Real or not ?

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$7.6 Trillion of debt will be maturing in 2012. Japan and the U.S. account for about $5.8 trillion.

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Manufacturing around the world is slowing, but is lumpy and may just be able to side step Europe’s debt problems.

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