End Of Day For EULand

Bond yields are spiking across Europe, not to mention the spreads between Belgian, French, Spanish, and Italian bonds and German 10-year bunds.

To give you an idea, here's today's carnage in 10-year spreads (via Bloomberg):

Spain: +4.97%

Italy: +7.25%

Austria: +13.21%

France: +14.57%

Belgium: +10.60%

But there's a simple reason behind this, other than simple market fear: the European Central Bank is drastically cutting its purchases of Italian and Spanish bonds on the secondary market, according to Spanish newspaper Cinco Dias (in Spanish).

The ECB cut these purchases by more than half last week—from €9.50 billion ($12.90 billion) the week before to just €4.48 ($6.08 billion) billion.

The bank is reportedly engaging in a drastic liquidity drain today in order to stem the effects of inflation in the markets that has been caused by that bond buying.

New ECB president Mario Draghi—who took office November 1—emphasized that the Securities Market Program (through which the bank can purchase sovereign bonds on the secondary market) was always a temporary program.

Investors have hoped that Draghi would take more aggressive action to stem rising bond yields across the eurozone. This liquidity draining operation suggests that he might not be keen to deliver on this hope

CHART OF THE MORNING: The French-German Spread That Nobody Wants To Think About

At some point soon, we might start looking at French-German bond spreads when we get up before we look at Italian-German bond spreads.

This more dramatic measure of Eurozone contagion continues to be alarming, and at one point today, the spread surpassed 200 basis points, before coming in a bit.

Here's an intraday look at the French-German 10-Year yields spread.

SPAINWRECK: European Bond Yields Explode After Some Ugly Auctions

ORIGINAL POST: Things are going from bad to worse in Europe this morning. Italy's bond yields hit a new high. French yields are hitting a new high. Sovereign CDS are widening.

And now Spain...

One of the original PIIGS that people have forgotten about for awhile is back with a vengeance.

It just held a 10-year bond auction, and according to CNBC's Beccy Meehan, the yield was an eye-popping 6.975%.

Here comes 7%.

You can get a sense of Spain's recent wild ride here, although this doesn't even capture today's big upward move in yields