David Fuller's view Judging from the chart action, last week's political discussions in Europe have frightened the daylights out of some bond vigilantes who had been shorting so-called peripheral sovereign debt.

For instance, the Spanish Government 10-Yr Bond Yield (weekly & daily) have slumped back to their August to October lows in the region of 5 percent which is a potential support level.

Italian 10-Yr Bond Yields (weekly & daily) have seen a lesser decline but no one can now doubt the importance of last month's two peaks just beneath 7.5 percent and there is currently no evidence that we have seen the end of this slide.

In contrast, Greek 10-Yr Bond Yields (weekly & daily) have continued to edge higher and Portugal's 10-Yr Bond Yields (weekly & daily) have barely paused within their uptrend.

Consequently, there are no prizes for guessing which two countries are most likely to exit the euro, sooner or later, and it is certainly not Spain or Italy. Meanwhile, vigilantes who were previously short bonds in the two larger Southern European countries have clearly retreated to the sidelines. It would be premature to assume that they will remain there because rescue of the euro remains a work in progress.

Austerity agreements and much closer fiscal union are part of the process. However, the bigger, longer-term challenge will be GDP growth generation within the single currency's new disciplines.