Spain in deeper trouble

11:56 El NACHO 0 Comments

The last thing that financial markets needed this morning was a wobbly Spanish auction, but that’s exactly what they got.

Spain’s borrowing costs have soared, with 10 year Spanish government bond yields jumping a massive 20 basis points at one point. 

On the face of it the auctions looked OK with the 19s covered 2.13 times and 26s covered 2.57 times, but despite the much higher yields on offer, the Spanish treasury only managed to shift €1.5 billion (£1.3 billion) of the 2026s with the market looking for between €1.7 billion - €2 billion (£1.5 billion - £1.75 billion). 

One bank reported zero buying interest from their clients, and with the auction not well placed, dealers have been selling into the market.