Stock markets fall after China crashes into bear market territory Good morning, and welcome to our rolling coverage of events across the eurozone, the financial world and the global economy. The government bond sell-off which began last week continues in earnest this Monday morning, putting renewed presure on Spain and Italy Sovereign debt is falling across the board in early trading, pushing up the borrowing costs of countries around the world. And some of the eurozone's weaker members are being hit hard. As I type, Spain's 10-year bond yield just hit 5% for the first time since the start of April, up from 4.88% on Friday. Italy's debt is also being pummelled, driving its 10-year yield up to 4.71% (from 4.58%). These bond yields are still some distance away from the danger zone (typically 7% is seen as the level where countries risk being locked out of the markets). But the speed of the reversal is a concern, as the markets remain spooked by the prospect of the US Federal Reserve withdrawing its stimulus measures. It looks like we're in for a rough ride for a while. As Ian WIlliams of Peel Hunt put it: The transition towards a more growth-driven phase of market performance is likely to remain bumpy though the summer as the long awaited improvement in corporate earnings has been slow to emerge. US Treasuries (America's government debt) is also sliding again this morning, pushing up its own 10-year bond yields by another 10 basis points (0.1%) to 2.61%. Meanwhile, over in China, fears over the ongoing liquidity squeeze in its banking system have sent its stock markets tumbling, in their biggest daily fall in four years (more on this shortly). Plenty to watch in the markets today..... While in the political sphere, I'll be monitoring events in Athens where the ruling coalition is down to just two parties after Democratic Left quit the government last Friday....