Prediction: Spanish yields to end week higher

This one is a mini prediction.  The sort of foolish short-term market movement calls that I think are usually such a waste of time.

But there is an angle here I’m exploring. Spanish yields have been climbing for months now on the very real risk of Euro breakup and Spanish default (at least in Euros). Yields were up to 7.6% last week before Draghi made a comment that the market believed meant they would buy Spanish bonds, as many and as often as necessary.

My take is that this is just one more in a long series of smoke screens without a real solution. The fire is still burning.  Spanish bond yields started the morning just below 6.8%. I’m fully expecting a further sell-off in bonds and yields to close Friday at above 6.8%.

Published by David Kirk

The opinions expressed on this site are those of the author and other commenters and are not necessarily those of his employer or any other organisation. David Kirk runs Milliman’s actuarial consulting practice in Africa. He is an actuary and is the creator of New Business Margin on Revenue. He specialises in risk and capital management, regulatory change and insurance strategy . He also has extensive experience in embedded value reporting, insurance-related IFRS and share option valuation.

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