While Spain brims with hope, amid dismal real data, as we noted earlier [3], Italy - despite its PMI 'proving' things are great - just missed its GDP growth expectations for the 9th of the last 10 quarters. Add in a prinkling of Berlusconi bafflement and 'the oldest bank in the world' about to be nationalized and the risks in Italian government bonds have pushed yields above their European neighbor for the first time in 18 months. The last time this huge debt-loaded nation's risk topped Spain's was in the run up to the peak in the European crisis in Q4 2011. But, of course, we have OMT now which will save us all...
[4]
Chart: Bloomberg