Getting a little Spanish bond yield perspective | FT Alphaville

Getting a little Spanish bond yield perspective

On Thursday there was an auction of Spanish 10-year date, aka mega headline-grabbing European peripheral sovereign benchmark debt. The sovereign found itself paying a euro-era high of 6.975 per cent for the €3.56bn of issuance.

The Spanish treasury had paid 5.433 per cent in an auction of similar securities on October 20th. The bid-to-cover ratio was 1.54 this time versus 1.76 last time, signalling a softening in demand.

Given that Spanish debt will continue to be more closely monitored in the coming months than the Tesoro Publico would perhaps like, FT Alphaville thought you could use a bit of context, using data provided by aforementioned debt agency.

First, here’s a sense of the past:

(Please note that the x-axis goes from average 10-year yields over a year, to the average yield paid in a given month in 2011 thus far. There were no issues in August. Source data here.)

And here’s a sense of the future (click to expand):

What role foreigners and central banks have to play:

Note that Asian investors are getting less keen whereas the French (and marginally the Germans) are stepping up to the plate. (Also we find the typo in the upper right a little unfortunate — Spain’s curve is not yet inverted, but yes, we’ll mostly blame central banks if that does happen).

Post-auction, yields have come down:

Forgive us for thinking it’s not going to stay this way for long… Blink and it’ll start going up again. We’re keeping motion sickness tablets in the desk drawer these days.

Related links:
Spanish bond yields near critical level – FT
Sentiment Deteriorates Further After Tepid Spanish and French Auction Results – Credit Writedowns
Morning MarketBeat: Ay Dios Mio – WSJ MarketBeat