The market seems to be warming to the idea of the potential for an EU bond insurance program for Spain. The fact that the ideas was proposed by the Finns, among the most hard-nosed of the European creditor nations, suggests it would be acceptable to the other Northern European members of the euro zone.
Spanish bond markets are not reacting much, having absorbed some supply at auction this morning. 2 year yields are flat at 3.35% while 10 year yields are 5 bp firmer at 5.87%.
Gold is rising this morning, presumably on Mid East tensions as Turkey authorizes cross-border military action in Syria.
