Spanish Yields Near Highs: Is the ECB is Doing Enough?
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With focus centered on economic data in the U.S. this morning, yields on 10-year treasures in Spain have quietly crept higher and traded back above 7 percent on Friday. Following an EU summit last month, yields on the 10-year in Spain pulled back and traded briefly near the lower end of their range. But on Thursday investors pushed yields back up despite a 0.25 percent cut by the ECB.
Other than general skittishness in the markets, it is unknown exactly why investors are shunning Spain debt, but it seems to be related to comments from the ECB, and could be tied to the ECB's failure to deliver on more aggressive action like a 0.50 rate cut or additional liquidity operations to support banks in the EU. In any case, positive sentiment following the EU summit is quickly fading and it looks like Spain is back in the hot-seat today.
Other than general skittishness in the markets, it is unknown exactly why investors are shunning Spain debt, but it seems to be related to comments from the ECB, and could be tied to the ECB's failure to deliver on more aggressive action like a 0.50 rate cut or additional liquidity operations to support banks in the EU. In any case, positive sentiment following the EU summit is quickly fading and it looks like Spain is back in the hot-seat today.
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