Debt crisis: Spanish borrowing costs hit euro-era high

Yields on 30-year and 5-year bonds in Spain hit a euro-era record on Friday as the Valencia region of Spain filed for financial assistance. Bloomberg reports Spain Bonds Slide as Valencia Aid Request Deepens Crisis

Spanish borrowing costs have soared to a euro-era record high on a market beset by doubts over a vast rescue loan for the country's banks and by fears of a Greek exit from the eurozone.The euro came under more pressure in early trading Wednesday, unconvinced by the deal struck by the 17 eurozone nations over the weekend to extend Spain a banking sector rescue loan of up 100 billion euros ($125 billion).

FROM Newsbook:European Union leaders have breathed a sigh of relief. Olli Rehn, the EU’s top economic official, said it was a “responsible step for securing the financial stability of the euro zone”. José Manuel Barroso, a former Portuguese prime minister who is now president of the European Commission, said the request would be “processed in the swiftest possible manner”.

MADRID (Reuters) - More than six million Spaniards were out of work in the first quarter of this year, raising the jobless rate in the euro zone's fourth biggest economy to 27.2 percent, the highest since records began in the 1970s. The huge sums poured into the global financial system by major central banks have eased bond market pressure on Spain, but the cuts Madrid has made in spending to regain investors' confidence have left it deep in recession.

CNBC asks So Why Are Spanish Bond Yields Falling? Well, that's a good question. Short answer: Well rates spiked dramatically, and we are seeing some retracement from the psychological balm of even more liquidity thrown from the global central planning cartel, otherwise known as the central banks.

Spanish borrowing costs have hit a euro-era high, after credit ratings agency Moody's warned Spain could be downgraded to "junk" status within three months as it slashes the country's rating by three notches.

TODAY'S biggest news is the word that the European Central Bank is intervening in European debt markets in force, buying up Spanish- and Italian-government debt. The ECB spent last week expressing reluctance to take this step, but without it, the euro crisis threatened to spin irretrievably out of control. What are these purchases all about, and will they work?