Big Picture
Euro-zone fears awaken, Fed cool on QE3, commodities weaken
It had to happen. After a very buoyant first quarter – and a strong first day of the new quarter – European debt worries brought global equity markets back to earth Wednesday.
But instead of Greece being the focus of concern it was Spain. Specifically, a disappointing bond auction that failed to be fully bought sent 10-year Spanish debt yields north of 5.6% – the highest yield since early January – and well above Tuesday’s yield of 5.4%. The upshot of the weak auction and the rise in yields is that bond markets are beginning to question the country’s ability to rein in deficits and avoid a financial crisis.