Spain is no Pig, no Bull

With Portugal, Ireland, and Greece down for the count all attention turns to Spain, but Spain is not pig. "We think the contagion stops here," said Erik Nielsen, chief European economist at Goldman Sachs – and many agreed. Portugal's total debt burden was greater, at 92.6% of GDP last year compared to Spain's 60%, but the Spanish deficit – the annual shortfall – was worse, at 9.2% to its neighbour's (recently upped) 8.6%. However , the Spanish government has not balked from aggressive moves to bring down its deficit, raising its pension age from 65 to 67, increasing taxes and cutting public sector wages. It has also injected small amounts of capital into the weakest banks, but did not repeat Ireland's mistake of guaranteeing bank creditors. Madrid now expects to cut its deficit down to 6pc as a share of GDP for this year. Read the rest of this Telegraph article here.

As you can see from the chart below, the Euro has broken above the trend line that goes back to the 2008 high indicating that the market also concurs with the article that Spain will not need a bailout.