Euro zone bond yields on the rise

Investors are still shying away from the euro, it appears.

Both Germany and Portugal held debt auctions on January 5 - and both countries saw the yields on their bonds move higher. The increases were not unexpected for Portugal, seen as one of the euro region's most troubled states - but the magnitude of the yield hikes was striking.

Portugal sold €500 million of short-term debt at a 3.7 percent interest rate - six times what the country's securities were paying out a year ago.

And the yields on Germany's Bunds rose to 2.87 percent, from 2.59 percent at the time of the country's last debt sale.

The yield increases could presage further troubles for the euro, which has eroded steadily in value since the fall. Increased volatility in the currency is all but assured, as well: UBS indicated in a recent note that currency market participants should gird themselves for a "super-volatile" 2011.

Indeed, without a concrete resolution to the euro zone's debt troubles, investors are likely to continue shunning both the euro and European government bonds.