Tue 4/17/12 4:18 PM – Markets Up Sharply on Good Spanish Debt Auction

Europe shot higher today on news that the auction of short-term Spanish debt went very well today. The yield was actually slightly lower than expected and there was enough demand to buy all that Spain had offered to sell. Now, much of that buying was by Spanish banks investing the money just received from the LTRO fund and getting a higher rate than they had to pay for it. The difference goes into profits but the downside is that it make European banks even more tied to sovereign debt.

Most major European markets were up between 2% amd 3% today. Of course that carried over to the U.S. and the S&P 500 index closed up 1.5%.The Nasdaq Composite was up 2% after falling yesterday.

Bonds and oil were up today while gold fell slightly, as did the U.S. dollar, both safe haven investments. Asia was lower today.

The Spanish have scheduled longer maturities for sale Thursday and that will be a little harder sell. We’ll see how it goes.

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