The Spanish 2-year bond yield is what we’ve called The Most Important Chart In Europe, since it really is the proxy for whether Spain can sustainably finance itself, or whether it will need to go cap-in-hand, looking for cash.
If borrowing costs at the 2-year period fall, this is very helpful.
And lately they have been.
Ever since ECB President Mario Draghi spoke a couple of weeks ago about how high borrowing costs were impeding monetary policy and thus came under the purview of the ECB to deal with, they’ve come off sharply. from nearly 7% to less than 4% today.
Here’s a 6-month chart via Bloomberg.
And then here’s the action just today…
Beautiful. Very nice to see.