Remember when Spanish debt fears gripped the markets? We do too … since it was only 15 days ago that Spanish CDS hit all time highs! If you can, make the enormous leap forward to today (note the heavy dose of sarcasm).
Spain attempted to auction 3 billion euros of debt and received decent demand, although at much higher yields. The 18 month bills sold at 3.721% vs. 2.664% last month, however, the bid to cover was stellar at more than 4 to 1. The markets verdict is that Spain can finance its debt, just at much higher prices. The higher short rates have boosted the entire curve and Spanish 10 year yields have soared.