Gathering more attention than usual will be next week’s Spanish bond auction. It’s appearing just ahead of the Italian general election and ahead of Spanish data that may suggest that the country missed last year’s deficit targets. France also appears in the debt market crosshairs. A double French auction appearing on the same day next Thursday, will end up being a true test of investor confidence in two of the largest economies in the Euro-zone.
Despite having raised almost +20% of this years bond needs, Spain will still be required to issue debt at a brisk pace. Its total 2013 debt issuance target is around +EUR122b. Even though Spain has become a periphery worry, France, the bigger of the two economies, is now beginning to cause more of a concern due to its “cyclical and structural mix.” The EUR will find fault if spreads begin to widen again.
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