Italian 10-year yield rises back above 7% ( 10YR_ITA 10YR_ESP ) (by William L. Watts)

FRANKFURT (MarketWatch) -- Italian and Spanish government bonds were under pressure Friday, pushing up yields as both countries prepared to auction debt next week in a key test of market confidence. The yield on 10-year Italian government bonds (it:10yr_ita) rose back above the 7% level to trade at 7.11%, a rise of 16 basis points. Borrowing costs above 7% are widely seen as unsustainable over the long run. Spain's 10-year bond yield (es:10yr_esp) rose by around 5 basis points to 5.63%. A basis point is a hundredth of a percentage point.

Euro-zone Nov. unemployment unchanged at 10.3% (by William L. Watts)

FRANKFURT (MarketWatch) -- The seasonally-adjusted unemployment rate in the euro zone remained at a record 10.3% in November, unchanged from the previous month, the European Union statistics agency Eurostat reported Friday. The number of unemployed in the euro zone increased 45,000 in November to 16.372 million. The rate was in line with forecasts. Separately, Eurostat reported that euro-zone retail sales saw a 0.8% monthly decline in November after a 0.1% rise in October. Compared to November 2010, sales fell by 2.5%. Economists had forecast a 0.4% monthly fall and a 2.5% year-on-year decline.

Euro-zone Dec. economic sentiment indicator falls (by William L. Watts)

FRANKFURT (MarketWatch) -- The European Commission on Friday said its economic sentiment indicator for the euro zone fell to 93.3 in December from 93.8 in November. Economists had forecast a decline to 93.0. The commission's consumer confidence index declined to minus 21.1 from minus 20.4 in November. Industry sentiment was unchanged at minus 7.1, while the services sentiment index fell to minus 2.1 in December from minus 1.6. The retail trade ndex declined to minus 11.7 from minus 11.1, while the construction index fell to minus 25.2 from minus 25.0.

German November industrial orders drop 4.8% (by William L. Watts)

FRANKFURT (MarketWatch) -- German new industrial orders saw an adjusted 4.8% monthly fall in November after a downwardly revised 5% rise in October, the economics ministry reported Friday. Economists had forecast a 1.7% monthly drop. Makers of capital goods saw a 6.5% fall in orders, while producers of intermediate goods saw a 2.9% decline and consumer-goods producers saw a 2% fall. Foreign orders fell 7.8%, the ministry said, while domestic orders declined 1.1%.