It may look like a replay of last May and June, soaring bond yields and all, but there are some important differences between the current bout of financial market distemper and that of the spring. At face value, it is somewhat worse. The interest rate demanded of the Spanish 10-year bond is about 20 points higher than it was at its most back then, and the risk premium embodied in the difference between the yield on the German bund and the former is 40 basis points greater – in fact at a euro-era maximum. But looking a bit beyond the immediate it is interesting to note that all this activity has not cut into euro exchange rates remotely as much as it did in the spring, that the price of … [Read more...] about Spain’s sovereign debt crisis: Round 2