Items of interest from The Guardian liveblog including the mention of the earthquake in Indonesia

http://www.guardian.co.uk/business/2012/apr/11/eurozone-crisis-live-spain-in-crisis

11.27am: The European Commission is turning the screws on Spain. It wants a "full picture" of Spain's budget consolidation plan, not only by central government. It says that, without information on regional budgets, it cannot provide any recommendations to Madrid. It's asking for the additional information by the end of April.

With regards to a bailout, the Commission is standing by its view that Spain will not need eurozone help for the recapitalisation of Spanish banks. We shall see...

11.18am: We've got some analysis of the various bond auctions from Gavan Nolan at Markit:

Overall, they were on the weak side. In the Italian auction, the yields on the one-year paper is twice what they were in March, so that's clearly disappointing. They managed to sell the full €11bn but with significant concessions and the bid/cover ratio wasn't great suggesting demand is waning on the domestic front.

On the German one, you could call it a failed auction because they haven't covered it. The fact that they had to retain a large amount of paper shows that Germany can't sell paper with unlimited demand.

Spanish and Italian bond yields continue to drop back from yesterday's levels. The yield on Spain's 10-year bond is currently 5.85%, while Italy's is 5.51%.

However, it is still getting more expensive to insure against a default in both countries. Spanish credit default swaps are trading at 4.85%, and Italy's at 4.35%. Nolan says that is probably due to a lack of liquidity rather than anything more dramatic.

11.08am: Lest we forget, Greece's seaman are still striking. Greek TV channel SKAI reports that the two-day strike started yesterday has prompted more than 10,000 ferry passengers to cancel their tickets and another 3,000 to change their dates of travel.

The 48-hour strike continues at Piraeus near Athens. Photograph: John Kolesidis/Reuters

Greek news site ekathimerini.com reports:

The strike, which has been held to protest the impact of the government's austerity drive on seamen's pensions and benefits, has fueled the exasperation of hoteliers and traders who had hoped to make up for sluggish business in Orthodox Easter week.

10.56am: There's a nice tweet from Geoffrey Smith of Dow Jones, putting some perspective on the German Bund auction, which got bids for €4.1bn of bonds, vs the target of €5bn.

Geoffrey Smith@Geoffreytsmith

Refusing to buy a 10-year Bund at 1.77% is like refusing to pay £10 for a pint of beer. Everybody chill.

10.42am: Now it's the UK's turn. We did better than the Germans, but demand was muted with bids for just 1.4 times the amount of debt on offer. The UK sold £4.5bn of 5-year gilts at 1.147%.

10.34am: But Germany has been punished for the low yields on its bonds and hasn't sold all of the debt on offer at an auction this morning.

It sold €3.87bn of 10-year bonds at an average yield of 1.77%, when there was up to €5bn on offer. The yield has also moved away from the record low of 1.637% reached earlier this week.

10.21am: There's quite a contrast between Italian and Swiss debt. Switzerland just sold 872m Swiss francs of 30-year bonds at a yield of 1.168%.

10.11am: Italy's one-year borrowing costs have risen for the first time since last November (when they hit a high of 6%). The yield rose to 2.84% at an auction this morning, from 1.4% in mid-March.

There was plenty of demand, with bids for 1.6 times the amount of debt on offer, primarily from Italian investors.

The yield on the three-month debt more than doubled to 1.25% from 0.49%.

The yield on 10-year bonds has come back since this morning to 5.54%.

Magnitude For Quake Off Sumatra, Indonesia Revised To 8.7 from 8.9 - USGS

11 Apr 12

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9.59am: There's been a tsunami warning issued after an earthquake, of magnitude 8.9, off the west coast of northern Sumatra. To put that in context, the Boxing Day quake had a magnitude of 9.1.

8.59am: There's a few lines coming through from the speech by Spanish prime minister Mariano Rajoy.

He will approve measures against tax fraud this week and opted for a tax amnesty rather than raising taxes.

The government will enforce a law that stops people making transactions of more than €2,500 in cash, presumably to clamp down on black market activity. Anyone found breaking the law will be fined 25% of the transaction.

Thanks to Bloomberg economics editor @lindayueh for those.

8.37am: European Central Bank board member Benoît Coeuré is trying to calm the markets this morning and defend the LTRO.

He says that the market situation in the eurozone has improved since February, but could still go the other way. On Spain, he says the Spanish government is taking reform steps, and there is no reason why the market should not improve there too.

He says the ECB decided on the LTRO because there was a risk of deflation. He accepts that there is now €800bn of excess liquidity in the euro system, which will persist throughout 2012. But he argues that there is not enough demand in the eurozone to create a risk of inflation risks.

He says the ECB has instruments to mop up excess liquidity, and that the bank's focus is on exiting crisis mode rather than responding to future catastrophe.

We can withdraw the ample liquidity created as a side effect of the long-term operation whenever the governing council deems liquidity conditions are excessive in view of the outlook for price stability.

He says the European capital market has been fragmented by the crisis and needs a "financial compact" to return to normal.

8.19am: Looking at the debt markets, Spanish and Italian bonds dropped again in value this morning pushing up their yields (the measure of the interest rate).

Spanish 10-year bonds opened 4 basis points higher at 6.01%, although they have since slipped back below the 6% mark. Italy's 10-year bond opened 4 basis points higher at 5.73%.

Spanish bonds are still a way off their high (since the euro was brought in) of 6.78% in November last year. That was before the ECB flooded the markets with cash under the Long Term Refinancing Operation, which supressed bond yields. The fear is that was just a quick fix. As Suki Mann of SG notes:

It appears that the LTRO was a game changer – for just a quarter.

By contrast, German sovereign debt was in demand yesterday, as it is seen as a safe place to put your money in troubled times. The value of German bonds rose to near highs, pushing their yields lower. That trend has reversed slightly this morning, as there's an auction of German debt coming up. But the yield on the 10-year bonds remains low at 1.67%.

8.02am: Spain's industrial output for February fell 5.1% year-on-year, lower than forecasts of a 5% drop and the biggest fall in three months. (Found it! Thanks, KhakiSuit)