Spain Pays almost 7% in new Bond Auction – EUR/USD Lower

12

This is getting really ugly. Spain’s fresh bond auction resulted in a very high price: bonds maturing in January 2022 (10 yearish) will yield 6.97%. This is adding pressure on the euro. The Spanish treasury collected a total of 3.562 billion euros.

The price in the secondary market isn’t so much better: 10 year yields are leaping to 6.71%. The Spanish/German bond spread is almost at 5% (or 500 basis points). Spain will hold elections on Sunday. Italian yields are well above 7%.

EUR/USD is now sliding to 1.3440, in the lower part of the range that characterized in the past two days (1.3420 – 1.3550). For more on the euro, see the EUR/USD forecast.

France will soon have its own bond auction. The spread between French and Spanish yields is touching 2%.

When will the ECB intervene in the markets? Yes, buying government debt makes governments lazy and is a “moral hazard”. But this bond rout is already spilling into the real economy. Isn’t letting the euro-zone economy collapse a moral hazard by its own right?

A 2008 style credit crunch seems close and so does a €100 billion bailout package for Spain.

Get the 5 most predictable currency pairs

About Author

Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned the significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.

12 Comments

  1. Pingback: Spain Pays almost 7% in new Bond Auction – EUR/USD Lower | Forex news

  2. Pingback: US Unemployment Continues Falling – More Good Signs from the USA | Forex Crunch

  3. Pingback: Forex Crunches for the Weekend – November 19 | Forex Crunch

  4. Pingback: Forex Crunches for the Weekend – November 19 | Forex Market Trends

  5. Pingback: Forex Crunches for the Weekend – November 19 | News of Business – Marketing | Forex | Gold | Money

  6. Pingback: Forex Crunches for the Weekend – November 19 | Forex news

  7. Pingback: Forex Crunches for the Weekend – November 19 | Forex

  8. Pingback: Forex Crunches for the Weekend – November 19 |

  9. Pingback: Forex Crunches for the Weekend – November 19 | Forex Crunch | Forex

  10. Pingback: EUR/USD Outlook November 21-25 | Forex Crunch

  11. Pingback: AUD/USD Outlook November 21-25 | Forex Crunch

  12. Pingback: AUD/USD Outlook November 21-25 | Forex news