Spanish Bond Yields Make New Highs As Financial Crisis Lurches On - WSJ.com

Spanish Bond Yields Make New Highs As Financial Crisis Lurches On - WSJ.com

"Spanish government bond yields made fresh euro-era highs Wednesday as investors continue to shun the country's debt as a result of its ongoing banking crisis. Italian debt is also coming under increasing pressure as investors wait for the next shoe to drop.
"The pressure is clearly building for some form of imminent additional policy response over and above the country's (Spain's) flawed banking bailout," said analysts at Rabobank. "This is further underlined by the tentative signs Spanish pressures are spilling over into Italy, with the latter looking to already be suffering from its 'next man standing status' as speculation builds over a more comprehensive rescue package for Spain."
At 0745 GMT, the yield Spain's 10-year benchmark was five basis points higher at 7.70%, after having traded earlier at a euro-era high of 7.67%, while the Italian 10-year was quoted at 6.55%, up five basis points but off Wednesday's high of 6.65%, according to data from Tradeweb.
As the Spanish financial crisis lurches on, yields on the country's shorter-dated bonds continue to jump higher, catching up with the longer-end and 'bear-flattening' the yield curve, a sign of heightened distress.
The yield on Spain's two-year bond is currently 6.56%, over 250 basis points higher on the month, a level that makes even short-term borrowing for Spain unsustainable."