Spanish treasury bonds are already yielding more than most other 12-month deposits in Spain. With yesterday´s issuance, the one-year notes were sold at an average of 3.7%, the highest level since 2008.
The treasury is overcoming the effects of the latest stress tests, which means that the market might give Spanish debt another chance. The yield on 10-year notes has gone down from 6.31% to 6.09%.
This is a precariously high level if we keep in mind that at the 7% level, Spain will be on a tightrope. If we finish the fiscal year with debt hovering around 70% of our GDP, we won?t be able to pay it. We have seen before bonds in the 4% range, but there was less debt overall.
Now this course has to be altered or Spain will sail past the point of no return.
