Spain in focus as the ten year yield crosses 5.75 .......

http://ftalphaville.ft.com/blog/2012/04/05/950501/spain-spikes-again/

Spain spikes again…

Posted by Paul Murphy on Apr 05 10:19.

Maybe it was Mario Draghi pooh-poohing the idea that the ECB might start to withdraw its support for european banks. Or maybe it was just further consideration of Wednesday’s frank words from Spanish prime minister Mariano Rajoy…

Spain is facing an economic situation of extreme difficulty, I repeat, of extreme difficulty, and anyone who doesn’t understand that is fooling themselves.

Whatever the fresh trigger, Spanish 10 year paper was marching higher again on Thursday:

Note also the steady deterioration  in Spanish sovereign CDS – now back at wides last seen in January…

…and compare with this with Italy…

The spread between these two since February’s crossover is clearly something to watch.

from today's The Guardian liveblog....

9.55am: Spanish sovereign debt has fallen in value again this morning, pushing up the yield (the measure of the interest rate) on its 10-year bonds to 5.75% this morning.

That's a new 12-week high, and a sigh that bond traders are wary that Spain can hit its fiscal targets.

Yesterday, the Spanish finance minister admitted that the main risk for the Spanish economy is the idea that its public accounts are "not sustainable". Gary Jenkins, analyst at Swordfish Research, agrees, saying:

Bond investors are unlikely to give Spain the benefit of the doubt and any further deviation from this year's budget deficit target will only make them question the 2013 target and indeed Spain's debt sustainability path even more.