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.