Spanish Yield Curve Inverts Most Since 1994

Tyler Durden's picture

The spread between Spanish 2Y and 10Y bonds has dropped to record lows as the yield curve inverts most since 1994. Troughing intraday at -12bps at its most inverted, today's as-good-as-failed Spanish bill auction sends an ugly message to the market that risk appetite is non-existent. At -5bps, if we end today at this level, it will be the first inverted close since August 1994.

Intrday of the last 20 days - we dipped inverted intrday on 11/9 and 11/10 but never closed.

Longer-term Spanish 2s10s differential is its most inverted since August 1994.

Chart: Bloomberg

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Robot Traders Mom's picture

This is looking more and more like the Greek 10/2's everyday...

hedgeless_horseman's picture

Today the Giant Squid (broke through 90 again).  Down -46.5% YTD.  Still glad they are a bank?

PY-129-20's picture

This is funniest thing today: Get this -

MP launches tear gas attack in South Korea parliament over US trade deal

NotApplicable's picture

Nary a one donned and cleared a gas-mask. Other than the guy at the podium who just stood there and ignored it, how can these people call themselves leaders?

/mock outrage

Harlequin001's picture

Well, does the short end come down or the long end go up from here...

and what does that do for Spanish finances?

Let me see...

redpill's picture

They started the year at 170+.  Truly amazing.  Die squid, die!

slaughterer's picture

It's dead, Jim.  Time to throw it in the Paella.  

Jim in MN's picture

Waiter, there's a failed bond auction in my punchbowl....

redpill's picture

And a Klein Bottle in my salad!

Tsar Pointless's picture

"C'mon, Baxter! You know I don't speak Spanish." - Ron Burgundy (Will Ferrell) to his dog in Anchorman

Spanish: It's the new Greek.

Jim in MN's picture

I learned it from a book. --Fawlty Towers moose head scene


Robot Traders Mom's picture

Bark twice if you're in Milwaukee!

a growing concern's picture

Why don't you go back to your home on whore island?

RonBurgundy's picture

You ate an entire wheel of cheese? That's amazing. . . I'm not even angry


I blurred my eyes. Looks perfectly healthy to me. 

AssFire's picture

Yo necesito barras de oro, para no quiero mierda de Euros.

Captain Kink's picture

David Faber is reporting this right now...he must troll here at ZH for news.

midgetrannyporn's picture

They read, they just don't talk about it.

topcallingtroll's picture

Ive even heard them twice in the last year say "some blogs are writing...." when it was clearly zero hedge and zero hedge alone.

bank guy in Brussels's picture

Yes, it's funny.

Karl Denninger is a big ZeroHedge camp follower. He used to say 'props to ZeroHedge' but then he was following ZH so many times, it got embarrassing for him.

So now Denninger writes his own piece, doesn't mention ZH gave him the story idea, and tries to link to whatever source might be there for the ZeroHedge article.

Quite a number of ZH commenters have said they were banned from Denninger's comment forum at one point or another ... sometimes for things that Denninger himself said much later.

magpie's picture

After reading his book all i can say is that whatever his other failings might be, his belief in mathematics makes him far too rational for our times. 

NotApplicable's picture

If he'd only listened to Mises, he'd know there's no math to be had for a world filled with subjective valuations expressed in pursuing human goals.

And if he'd listened to Rothbard, he'd know the closest thing one can do to mathematical analysis is to rank these personal valuations in order of desire, compare that to their current prices, then act in manner to maximize utility while meeting your needs.

But no, let's play pretend scientist instead.

tmosley's picture

Mathematics is worthless in a system that has human variables, especially when those variables know about the math, and create an infinite feedback loop.

This is why good economists don't bother with complex equations, and rely on their inherent understanding of how people think and act when presented with different sets of data and dilemmas. 

Dick Darlington's picture

Pricing like it's pre-zeuro. Euro has failed massively and only the idiots in Brussels like the unelected mao-extremist Mr Barroso have "CONfidence" in this nightmare. Have to say i'm really surprised that it took SO LONG for the "markets" to realise this. Euro is an economic prison for all of the countries involved. Even for Germany it has become a prison now that the ugly truth of the political utopia is surfacing and everybody wants the Germans to pay their debt and deficits. No amount of continuous bail outs in various forms will change the reality. Euro MUST be broken up voluntarily or it WILL get broken up by force. It seems that the eurofanatics are willing to destroy everything and put hundreads of millions of people at risk in order to chase their broken dream. I only hope they will wake the f*ck up and admit their pet project has failed and start planning for return to old currencies.

Cdad's picture

Be of good cheer.  Today is BlackRock Breakdown Day!  Unless, of course, Larry Fink can get some traction with the StuporCommittee to write in some fine print "Making Pension Fund Managers Buy Euro Debt."

Jayda1850's picture

Just a month ago, the EU was working on a plan to save all of Europe with the EFSF. Equities and the Euro surged on the brilliance of the European overlords. In one short month, the entire world knows the EFSF is DOA and couldn't have a sucessful bond auction without buying their own bonds. Contagion has now infected the core members as the whole experiment continues to unravel. Where will we be in another month? Gonna be some entertaining holidays.

topcallingtroll's picture

How could contagion not affect the core.

The core and periphery are one unit.

Yields will converge yet again, but in the wrong direction once everyone figures out this is just a shell game without a pea.

the not so mighty maximiza's picture

daaaaaah this is bullish right?

topcallingtroll's picture

Now that the entire world has realized that the ECB and the EU are just a poorly manufactured pirated copy of the Fed and the USA it appears everyone is going back to the brand name merchandise.

Chimerika rules!!!!

firstdivision's picture

We keep bouncing off the 50% retracement of the rumor rally.  I think the PPT have drawn a line in the sand.

monopoly's picture

Starting to get interesting and real.



Wall Street Unoccupied With 200,000 Job Cuts

Sudden Debt's picture




bank guy in Brussels's picture

Am shortly heading downtown to meet a Spanish friend at a Brussels bar, where I will order a half-litre glass of beer to start ... I'm doing my part for the EU stimulus programme!

NotApplicable's picture

Since you'll be "working on a buzz," do you have to pay VAT, too?

imsaul0968's picture

For those of you who invest in an IRA or for long term goals, theres a better approach than buy,hold,hope. Stocks follow the economy so analyzing the economy, specifically the factors that are "leading indicators" and having exposure to equities only when the economy is headed in the right direction and avoiding equities in favor of safe haven baskets is a much more logical approach. And missing the major drawdowns is the only way to help ensure meeting your goals.  If you are interested in investing in a portfolio that tactically invests in equity and safe haven baskets via ETF's automatically, please email me at:

and I'll add you to the weekly market commentary & portfolio update distribution list.  Its free to add you and you can follow along our model and our views.  We have been RISK-OFF since 6/30 so have missed all this wicked volatility. Currently invested in short duration treasury baskets as flight to safety drives interest in our debt. 

tmosley's picture

Nice job using italics so people can't junk you, spammer.

hawks5999's picture

So is this what Conservative wins are supposed to do?