Spain Auction Eur2.4B Done at average yield of 5.074%

With fears still there in the market, Spain successfully sold Eur2.4B of 12-month T-bill at an average yield of 5.074% versus 2.985% at the last auction for debt of this maturity in May. The paper was 2.2 times subscribed compared to 1.8 last month.

Spain faces a harsher test of investor appetite on Thursday when it action up to 2 Billion Euros maturing in April 30 2014, July 30 2015 and July 30 2017 (US$1 = 0.7949 euros).

Some thoughts:

1. The next country in the focus would be Italy. The Europe crisis drags from last year until today. In my opinon, the world economy would experience a slower economy growth this year, but the probability of double dip recession is slightly lower compared to few months ago. Normally the recession would be in a time horizon of 6 months to 12 months.

2. China also is expected to have a slower economy growth, as China governent unlikely to have another stimulus to its economy this year. 

3. Commodities market remains weaker, as  crude oil market and other soft commodities market remain in the lower price range. This indicate an unfavourable consumer market. Nonetheless, I do expect a better 2nd half compared to 1st half.