Spanish Yield Curve Inverts Most Since 1994

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