As the socioeconomic fates of the world's biggest countries travel down the road of life, sometimes it's smooth sailing and sometimes there's a 17 car pile-up.  The more subtle distinctions would be the periodic potty breaks, flat tire changes and refueling.  Somewhere slightly farther along the spectrum of concern would be the actual breakdowns on the side of the road.  Oftentimes, engines start making funny noises before such breakdowns.

The current European market environment could be characterized as just starting to make those sorts of funny noises again.  Keen ears heard similar (but certainly louder) noises in 2010, well before Greece spiraled out of control.  This time around, France's engine is making the most disturbing noise--mainly because it's so much bigger than Greece.

The following chart shows the gap between various countries' 10yr yields and Germany (Germany = EU's benchmark... a sort of stable yardstick by which other countries are measured).  The top portion shows more of the relative movement because each line is re-scaled so its highs/lows fit the y-axis.  The bottom portion shows the actual spread levels with no y-axis scaling so you can get an idea that the outright level of concern is merely "engine noise" and not an actual 17 car pile-up, as we saw in 2012.

This European engine noise has been helping US bond markets--another safe-haven, relatively (like Germany).  It happens to coincide with some of the shine coming off the post-election rally.  Note in the chart below that stocks have stalled at late January highs, and bond markets are taking the opportunity to retrench some of the post-election losses.

Indeed, it seems that, absent ongoing stock market gains, something around 2.50% in 10yr yields seems to be where bond traders want to reinforce a longer-term ceiling.

Today brings only the 10yr Treasury auction in terms of relevant scheduled market movers.  That'll happen at 1pm and will serve as another periodic acid test for global demand.  Traders have been trading in such a way that suggests they're expecting a strong auction, but the more strength we see ahead of the auction, the more rare/impressive it would be to see strong results.