Spain Is Having A Monster Day

The Spanish 2-year bond yield — the ultimate proxy for nervousness in the Eurozone, since short-term Spanish borrowing is what does all the “work” in financing the government — is staging a huge rally this morning, with yields falling below 3%. Here’s a 1-month chart via Bloomberg:

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The cause? Most likely Moody’s electing not to downgrade Spain at this moment, which is a big relief to those who thought a downgrade might force some selling.

On the equity side, the IBEX 35 is now up 1.5%, which comes on top of a 3.4% gain yesterday, and also a gain on Monday, making it a pretty huge week.

There’s growing hope that a bailout deal/request is imminent.

Spanish optimism helped drive a US rally yesterday. Coming back from the bring definitely seems to be a major sentiment boost.

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