The yield on the Spanish 10-year bond has just fallen below 3% for the first time since 2005.
Spanish bonds — like other European peripheral bonds — have gone on a ridiculous run lately.
As a reminder, this is what the 5-year chart looks like (via Bloomberg). Not long ago, the bonds were yielding almost 8%
By now you should now the story, but just in case you don’t:
In the summer of 2012, Mario Draghi issued his famous “Whatever It Takes” declaration, bringing in an implicit backstop for any country that found itself in trouble.
Between that ECB backstop, a slightly improving economy, and ongoing lack of inflation/deflation throughout the Eurozone, there’s been every reason to snap up these bonds.
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