by Calculated Risk on 1/13/2011 02:39:00 PM

A few more "successful" auctions. Time will tell. Also Jean-Claude Trichet made some cautious statements about inflation in Europe ... and a history and analysis of the euro from Paul Krugman.

• From the WSJ: Strong Demand at European Debt Auctions

Both Spain and Italy sold the maximum intended amounts they had planned, with Spain selling €3 billion ($3.94 billion) of a five-year bond and Italy selling €6 billion in five- and 11-year bonds.
...
Spain's Treasury sold the bonds at an average yield of 4.542%, up from 3.576% at the previous auction Nov. 4 ... Italy sold its five-year bond at a yield of 3.67%, up from 3.24% on Nov. 12, while the yield on the longer bond rose to 5.06% from 4.81%.

• From the Financial Times: Hawkish Trichet comments boost euro

“Overall, we see evidence of short-term upward pressure on overall inflation, stemming largely from global commodity prices. While this has not so far affected our assessment that price developments will remain in line with price stability over the policy-relevant horizon, very close monitoring of price developments is warranted,” [Jean-Claude Trichet, chairman of the European Central Bank] said.
excerpt with permission

• And some history from Paul Krugman in the NY Times Magazine: Can Europe Be Saved?. Krugman explains the history and the problems with the euro - and there is an interesting discussion comparing and contrasting U.S. state issues with the government issues in Europe.