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Spain had a very successful bond auction, especially when  comparing  to previous bond auctions. The yield that Spain got this time stood on 5.666% instead of 6.647% last time. The bid to cover ratio was 2.8%.

EUR/USD temporarily ticked higher but couldn’t really push forward.

The auction was also positive in other aspects: Spain raised more money than projected: nearly 4.8 billion euros instead of 4.5 billion. It’s important to stress that this is not the first time that Spain underestimated the outcome.

Spain enjoyed lower yields in the markets since Draghi said he will do “whatever it takes” at the beginning of August. A second positive wave came after the ECB presented its Outright Monetary Transactions program (OMT).

However, for Spain to indeed receive bond buying from the ECB, it still needs to ask for aid. The lower yields enable Spain to take its time with this move.

Spanish PM Rajoy might also have political calculations: his home region of Galicia holds elections on October 21st, and his ruling PP party could lose these elections. Asking for a bailout could be politically damaging.

The questions are: Can Spain continue enjoying the promise of the ECB’s bond buying without asking for aid and without the actual buys? Is the bazooka big enough? Or will the markets eventually turn against Spain?