With Spanish and Italian bond yields on the rise and equities falling sharply in the U.S. and Europe, it is no surprise to see the euro continue to weaken against the U.S. dollar. The level of fear in the financial market is extremely high and the sell-off in the EUR/USD tells us that investors are worried about further trouble ahead. The persistent weakness in the EUR/USD along with the rise in bond yields and slide in stocks provides at least 3 interesting takeaways:

#1 - First and foremost regardless of the denials by Spanish lawmakers, investors have already begun to price in a full scale bailout. Over the past year and a half, we have seen the market turn a number of countries into panhandlers asking for help from the European Union. Borrowing costs in Spain have already reached unsustainable levels and the price action in the euro suggests that