This page has been archived and commenting is disabled.

As Spain Prepares New Debt Issuance, Euro Tumbles, Greek 3 Years Hit 15%, And Portugal CDS Blows Out

Tyler Durden's picture




 

Today Spain will test the capital markets with a downsized E2-3 billion 5 year issue (from E4.5 billion) carrying a 3% coupon. The yield on the note is expected to come higher than existing comparable maturities which are trading at 3.3%, thus pricing will likely be in north of 3.5%. At the end of March, Greece managed to raise 5 year bonds at 2.8%: there are no concerns that Greece will be able to repeat that result, much to the negative P&L of all those who bought into the last bond issue.  "Spain is firmly in the eye of the storm, and the Spanish
treasury cannot allow this sale to fail," said Jose Garcia
Zarate at consultancy 4Cast. Yet as we showed yesterday, traders are not so worried about Spain, whom they have pretty much written off now, as the UK, France and Germany. In the meantime, the PIIGS fire is raging: Greek 3 Years just hit 15%, as its CDS trades 30 bps wider since the NY close, now at 877 bps. And the eye of the hurricane is moving west: Portugal CDS hit another high of 456 bps today, implying a 33% chance of a sovereign default. Lastly, the euro is plunging and after hitting an overnight support in the low 1.27 area, has bounced slightly. Spain will need all the help it can get. In the very least, today will be a test whether the recent rumor spread by a prominent nationalized and GGB heavy UK bank, that Spain has requested a E280 billion rescue package, was true or not.

 

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Thu, 05/06/2010 - 04:42 | 333975 Tart
Tart's picture

Harry Wanger would think this is bullish

Thu, 05/06/2010 - 11:26 | 334511 BlackBeard
BlackBeard's picture

Harry Wanger's probably sorting out a margin call.

Thu, 05/06/2010 - 05:58 | 333976 Renfield
Renfield's picture

HA!!

Thanks for the news roundup Tyler! Wadda circus. As the euro bounces off its lows of 1.274 with a longer green hour candle now than we've had all week.

Makes perfect sense, considering the Brits just issued a dismal Services PMI report. So the GBP jumps too. Awesome.

What really made me laugh was the report was leaked two (2) minutes ahead of time, and some big wheel proceeded to put the big short on GBP. Only to be steamrolled over by the Big Bounce up on no good news...

I'm holding out, refuse to buy either of these currencies without at least one damn fine reason...and not trusting the nice man behind the curtain - whoever's doing the buying has their work cut out for them. Quite the trading bounce. Wonder how far it falls after this.

Or is this all bullish, and I in fact should be buying now!

ETA: Tyler Durden, you are really on a roll, man. I can't even keep up with all your postings, and let's just say the MSM can't see you for dust. My hero! So all that bounce was just prudent profit-taking - holy hannah. This is the first time in my short trading experience that I've ever seen a real CRASH, and I must say it's better than daytime soaps for sheer drama....

Thu, 05/06/2010 - 04:47 | 333977 Alex Lionson
Alex Lionson's picture

And in the meantime the European politicians keep on mumbling something about EMU’s un-breakability, sustainability, longevity and other rubbish like that…

Thu, 05/06/2010 - 14:03 | 335021 jmc8888
jmc8888's picture

Like the Titanic being unsinkable, until, it sank.

Thu, 05/06/2010 - 04:53 | 333980 heorot
heorot's picture

tic toc and the party won't stop, no! Actually it just began. Buckle up, it's gonna be a bumpy ride!!!

Thu, 05/06/2010 - 04:53 | 333981 THE DORK OF CORK
THE DORK OF CORK's picture

Hugh Hendry yesterday - London is fighting a good war with limited resources as per usual - Hendry is one of the few I guess.

This boy can dogfight with the best of them but these straight and level German bomber pilots are easy prey .

 

www.youtube.com/watch?v=F5XIF2P5nJ8 

Thu, 05/06/2010 - 04:55 | 333984 Sudden Debt
Sudden Debt's picture

Europe will soon have more stuff on the moon then the US

The way they shoot it all up :)

Thu, 05/06/2010 - 04:56 | 333986 Sudden Debt
Sudden Debt's picture

Now the EU politicians are saying the low Euro is a blessing :) everything is going according to plan :)

Thu, 05/06/2010 - 05:05 | 333993 JacksCompleteLa...
JacksCompleteLackOfSuprise's picture

Its spin to an extent, but it is good for German exporters.

Thu, 05/06/2010 - 05:02 | 333991 JacksCompleteLa...
JacksCompleteLackOfSuprise's picture

Spains auction went well according to MW (http://www.marketwatch.com/story/spanish-bond-auction-nudges-euro-off-lo...).

 

So who would buy these things? The most obvious candidates; Euro banks, who know they will be able to use them as collateral, or the ECB itself? FED? BIS?

Thu, 05/06/2010 - 05:07 | 333995 MsCreant
MsCreant's picture

Last one standing gets to hold the poo bag?

Thu, 05/06/2010 - 05:12 | 334001 JacksCompleteLa...
JacksCompleteLackOfSuprise's picture

Yeah well ... last one standing gets to collect the collateral, some of which might not be paper (at least they can have a bonfire to rally facists around).

 

Its like there is a financial war going on between the USD and EUR, not sure how it works, just gettting the 'vibe' of the thing. I suppose the victor gets to plunder the loosers assets at pennies on the fiatsco?

 

Anyone else have a better understanding of this?

Thu, 05/06/2010 - 05:59 | 334044 Renfield
Renfield's picture

I don't mind volunteering to hold it, if I'm allowed to set it on fire and put it on Bermonkey's doorstep, then ring the bell and run away.

Thu, 05/06/2010 - 05:08 | 333997 Tart
Tart's picture

May 6 (Bloomberg) -- Spain paid the highest yield since May 2008 to sell five-year bonds in Madrid as investors demanded a greater return on concern the nation will struggle to control its budget deficit.

Thu, 05/06/2010 - 06:53 | 334098 ZackAttack
ZackAttack's picture

Tyler got it right. Yield was 3.58...

 

The yield on the note is expected to come higher than existing comparable maturities which are trading at 3.3%, thus pricing will likely be in north of 3.5%

Thu, 05/06/2010 - 05:14 | 334003 JacksCompleteLa...
JacksCompleteLackOfSuprise's picture

Yield was 3.58% plus 5% coupon, at the risk of exposing my ignorance, does that figure to an interest rate of 8.58% on Spanish debt?

Thu, 05/06/2010 - 12:32 | 334729 rmsnickers
rmsnickers's picture

No.  Yield is 3.58% but the coupon for the 5 year issued was 3%...they sold for less than par.

Thu, 05/06/2010 - 05:15 | 334004 JimboJammer
JimboJammer's picture

End  the  Euro ...   Don't  allow  the  Amero  to  get  into  >>>

USA  /  Canada  /  Mexico ...  stop  the  one  world  Gov.  plan .

It  sucks  Big Time... !

Thu, 05/06/2010 - 05:37 | 334016 sangell
sangell's picture

Has Spain borrowed the $10billion they have to 'loan' to Greece at 5% yet?

Thu, 05/06/2010 - 05:55 | 334041 JacksCompleteLa...
JacksCompleteLackOfSuprise's picture

sure Lisa, ham, bacon and pork chops all come from the same 'magical' animal!

Thu, 05/06/2010 - 05:52 | 334035 Albatross
Albatross's picture

Plus, out of $3billion, Spain were able to

sold only $2.58bil. and that came

at a much higher rate than expectations.

Thu, 05/06/2010 - 06:30 | 334081 Grand Supercycle
Grand Supercycle's picture

 

The proprietary indicators I use can identify trend changes before they occur and they have been warning of a USD rally since last year.

Just posted a new EURUSD chart: showing long term trendline with important support around 1.2770

http://www.zerohedge.com/forum/latest-market-outlook-0

Thu, 05/06/2010 - 11:55 | 334607 BeSosaNotTony
BeSosaNotTony's picture

Too many inflated egos are on the line to let the Euro just wither and die, but it seems as if it's just forestalling the inevitable--either you totally federalize Europe (which is not going to happen), or blow it up and start over again with a slightly devalued Euro. The Germans won't be happy, but then again it's best for their long-term future anyway. 

On a semi-related note, what would happen if we didn't have fiat money anymore but instead once again tied it to some commodity (oil? gold? silver?)...would it actually matter? I'm not so sure that it would in this instance since so much of the futures trading and derivatives swaps are for ludicrous amounts that are for the most part never realized anyway--but it's an interesting thought experiment, to say the least. 

Do NOT follow this link or you will be banned from the site!