Pressure is building on Europe's third-largest economy
• Today's agenda
German consumer prices fell 0.2% in May, taking annual inflation to 1.9% - the lowest rate since December 2010 and compared with 2.1% in April. The figures are in line with analysts' expectations.
Here is today's agenda:
7am German inflation for May
8.30am Italian prime minister Mario Monti speaks before parliament on Europe
10am April Eurozone industrial orders
1.30pm US retail sales for May
Angela Merkel to meet opposition leaders
All times London time (BST)
Good morning and welcome back to our live coverage of the eurozone crisis and world economy. Well the relief over the Spanish banking bailout was certainly short-lived. Interest rates on Spanish 10-year government bonds began rising on Monday afternoon again and hit 6.8% yesterday, a rate not seen since the pre-euro days of the 1990s and closer to the key 7% level that proved unsustainable for Greece, Ireland and Portugal.
Italian bond yields also moved higher, with pressure building on Europe's third-largest economy ahead of two bond auctions. Italy is due to sell one-year bills today and three-year bonds tomorrow.
Stock markets seesawed yesterday although stocks staged a small rally late in the day amid hopes that central banks could spring into action.
Charles Evans, a member of the US Federal Reserve's rate-setting committee and president of the Chicago Fed, suggested that more easing could well be required to help jobs growth, ahead of next week's Fed meeting.
Meanwhile European Central Bank policymaker Josef Makuch, who heads the central bank of Slovakia, said "the ECB will do what is needed" - suggesting interest rates could fall to zero, something that president Mario Draghi hinted at last week. However this was tempered by his comments that more LTROs weren't on the table.
In Greece, daily cash withdrawals have increased from around €100m to €500m a day, as fears grow that this weekend's election result could be a precursor to the beleaguered country leaving the single currency.
Today, German chancellor Angela Merkel is meeting opposition leaders to try to agree when the ratification of the new bailout mechanism, the ESM, and the fiscal compact can take place - ahead of the EU summit on 28/29 June.
