Spanish Bond Yields Plunge After Positive Bond Sale
Spain's Treasury had a very positive auction this morning leading to plunging rates for 3 & 6 month bonds. Though getting some play in the media, these auction results are being somewhat ignored. Not that the market has ignored them with the roughly 3% rise in US markets. 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...