Spain’s bond auction on Thursday had a stronger demand with their 10-year bonds sold at a yield of 5.743% up from 5.403% when the bonds were previously sold in February. Overall it has been a reasonable result, with the rate of the two year bonds dropping to 3.463% from 3.495% in October; however challenges still remain for the economy.
Spain is reportedly cutting €27billion from its budget this year and is said to be one of the toughest austerity drives in its history, with unemployment in Spain currently the highest in the EU at 24%.
With investors worrying that Spain or Italy are edging towards a bailout fund the euro is far from out of trouble yet.
The dollar had little change overnight with US data yesterday having little impact while the U.S jobless claims fell by 2,000 to 386,000 in the week ended April 14 from a revised 388,000 which was higher than initially expected.
With focus today on the US February CPI and industrial data we could see a lot of volatility in the market.