The yield on Spanish 10-year debt has exploded on Tuesday morning:
It’s now close to a fresh high for the year:
The trigger was an auction of 12-18 month bills.
Now, the bid-to-cover ratios in the auction were good, but the price investors were prepared to pay much, much less so.
Via Reuters:
RTRS-SPAIN SELLS 1.99 BLN EUROS OF 12-MONTH BILLS VS 3.73 BLN EUROS AT PREVIOUS AUCTION
RTRS-SPAIN SELLS 0.52 BLN EUROS OF 18-MONTH BILLS VS 1.24 BLN EUROS AT PREVIOUS AUCTION
RTRS-SPAIN SAYS 12-MONTH BID TO COVER RATIO 2.23 VS 1.90 AT PREVIOUS AUCTION
RTRS-SPAIN SAYS 18-MONTH BID TO COVER RATIO 4.54 VS 3.66 AT PREVIOUS AUCTION
RTRS-SPAIN SAYS 12-MONTH BILL AVERAGE YIELD 3.449 PCT VS 2.363 PCT AT PREVIOUS AUCTION
RTRS-SPAIN SAYS 18-MONTH BILL AVERAGE YIELD 3.721 PCT VS 2.664 PCT AT PREVIOUS AUCTION
So capital is available but at a very high price.
Related links:
Spain is all about the banks – FT Alphaville
Swelling Spanish bond yields - FT Alphaville