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Spain raised 4.98 billion euros, higher than a range of 3.25 to 4.25 billion. The yields for all maturities were lower than previous auctions.

This helps stabilize the euro, and keep it above critical support at 1.3145.

Average yields for 12 months was 4.05%, significantly better than 5.022% recorded in a previous auction for this maturity. The bid to cover was an impressive 3.1, compared with 2.13.

Regarding 18 month bills, the yield also fell from 5.159% to 4.226% and the bid to cover here was 4.97, slightly worse than 5.96 last time, but still impressive.

Yields still have a long way to go and they are still higher than two auctions ago, but after they rose and rose, this fall is some good news, and a nicer welcome to Spain’s new government, which will assume power soon.

EUR/USD is trading at 1.3167, holding well above the critical 1.3145 line, which is the low of October 4th and the lowest level since January. Resistance is at 1.3212.

For more on the euro, see the euro dollar forecast.

The  German ZEW Economic Sentiment came out a bit better than expected, at -53.8 points, better than -56.1 that was expected.

This is still deep in negative territory and shows great pessimism, but estimates were even worse.