European Sovereign Debt Market Sounds Alarm Bells

The European sovereign debt market is flashing warning signals as Italy's 10-year bond yields hit 4.02%, France's hit 4.08%, its highest since 2009, and Germany's, usually a stable anchor for the system, reached a 15-year high of 3.23%. Meanwhile, the UK's 10-year bond yield climbed back above 5%.

The European Central Bank (ECB) is not fighting this rise in yields; instead, it's contributing to it by pricing in a 90% probability of an interest rate hike on September 10 for an economy that's barely growing.