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Italy managed to raise the money it wanted in a BTP auction, 3 billion euros. But the price was dear: the yield rose to 6.47% – high for 10 years, and even worse for 5 year bonds.

The last 5 year auction resulted in yields of 6.29%. This isn’t a big jump, but still a disappointment, after Spain saw a drop in yields.

EUR/USD is retreating from the 1.3060 area and is floating in a narrow range above 1.30. 1.3060 held the pair before yesterday’s American rate decision and after the fall, it capped the pair.

It managed to reach this area after things calmed down. Yesterday’s Spanish auction was more successful – Spain saw a drop in its yields from a previous auction.

Italy continues to be the epicenter of the crisis. Spain is drifting away.

Euro-zone industrial production dropped by 0.1%, almost as expected. Other than that, a vote of confidence passed in Finland, following the recent EU Summit.

For more on the euro, see the euro/dollar forecast.