Just catching up on news this morning and seen that Spain only sold €3.2bn out of €3.5bn on offer in a 10 and 15 year auction.

Yohay at Forexcrunch.com (who knows his Spanish stuff) notes the high yields that came with the sale and the first inclination that there’s signs of problems in markets.

Spain tried to raise a maximum of 3.5 billion euros in the markets and managed to raise only 3.2 billion. In addition, the yield came out at 2.20% after 2.08% last time. This is certainly a sign of stress and a liquidity crunch in markets. Spanish 10 year bond yields are 18 basis points higher, the biggest jump since June 2013. This may be a one off and the situation in the fourth largest euro-zone economy has certainly improved. However, when joined by the jitters in Greece, it already seems quite worrying.

Two days in and European yields continue to rise heavily. While the OMT may be still sitting on a desk in the European Court of Justice, it is one of the tools the ECB has in it’s back pocket to alleviate a potential liquidity crunch and an unhealthy explosion in European bond yields. It’s just something to consider that the market chatter may turn to ECB intervention if these move continue and gather pace.