Spain was able to sell a little over $7B in 3 & 6 month bonds at interest rates 300 bps below the previous auction in November. That is an incredible drop as follows:
- sold €3.7 billion in three-month bills at 1.735%, compared with 5.11% in November
- sold €1.9 billion of six-month paper at 2.435%, compared with 5.227% last month.
What debt crisis? Or at least in the case of Spain. Maybe it will only be a short term phenomenon as this comes one day prior to the ECB launches new three-year lending facilities for the area's banks.
Of course, Spain had another good auction a week or so ago when it sold more bonds than planned. Either way, it's a good sign that some of the European programs are starting to help. At the very least, Spain appears out of trouble for the moment. Now if only Italy could join them in the low rate situation the US equity markets could boom.
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