EU Sovereign Debt, U.S. Consumer Retail Sales, and More
EU sovereign debt sales continue, as Spain sold 3.16 billion euros ($4.3 billion) of 12-month and 18-month bills, compared to a target of 3.5 billion euros. Mario Monti, Italy’s next presumed PM, is striving to form a new government while struggling to implement reforms with the current Cabinet. While contributing 20% to EU GDP and a forecasted 1.5% growth rate in 2011, the EU's growth economic growth remains sluggish (European Union’s statistics office, IMF, and OECD, and other sources). The cost of insuring French sovereign debt has increased and bond yields now exceed 5.2%; Italy’s 10 year bond yield remains hovering at approximately 6.8% and was in excess of 7% briefly; France’s yield exceeds 3.5% while Spain is above 6.2%
In the U.S., the strength of the consumer retail sales remains closely monitored (October retail sales will be released today), with growth as a counterweight to the negative effect of U.S. unemployment levels. U.S. retail sales increased 1.1% in September, as did manufacturing and exports; long-term, these continued strengths will help promote U.S. GDP growth, with anticipation that the EU, while slowly, will continue to promote orderly adoption of eurozone fiscal austerity while providing liquidity where, and as, needed.