Spain 3-Month Letras Auction

Info

History

Chart

Impact:

Low

Next Release:

Date:

Period:

What Does It Measure?

The Spain 3-Month Letras Auction measures the demand for Spain's short-term government debt, specifically focusing on the issuance of 3-month treasury bills. This indicator assesses key areas such as investor confidence, liquidity in the financial markets, and government financing conditions, with the auction's success gauged by the bid-to-cover ratio and interest rates set during the auction.

Frequency

The auction is held quarterly, with the results typically released within a week after the auction date.

Why Do Traders Care?

Traders prioritize the results of the 3-Month Letras Auction due to its implications for Spain's fiscal health and monetary policy direction, as a strong auction can indicate high demand for sovereign debt and confidence in the country’s economic stability. Changes in auction outcomes significantly affect bond prices, yields, and can influence the euro's valuation against other currencies.

What Is It Derived From?

The auction results are derived from bids submitted by a wide array of investors including institutional investors, banks, and retail investors, where competitive and non-competitive bidding is used to determine the successful interest rates. The process typically employs a Dutch auction format, meaning bonds are sold to the highest bidder at a uniform rate determined during the tender.

Description

Preliminary and final auction results differ in that preliminary data provides early insights into the demand and debt costs, while final results confirm the details and are subject to less change. The auction impact is primarily assessed on a month-over-month basis (MoM) as investors analyze the immediate effects of new debt issuance and liquidity in the market.

Additional Notes

This auction serves as a coincident economic measure, reflecting immediate market conditions and investor sentiment. It provides insights into broader trends in sovereign debt markets, indicating potential movements in yields against similar auctions in other eurozone countries.

Bullish or Bearish for Currency and Stocks

Higher than expected: Bullish for EUR, Bearish for Stocks. Lower than expected: Bearish for EUR, Bullish for Stocks.

Legend

High Potential Impact
This event has a strong potential to move markets significantly. If the 'Actual' value differs enough from the forecast or if the 'Previous' value is significantly revised, it signals new information that markets may rapidly adjust to.

Medium Potential Impact
This event may cause moderate market movement, especially if the 'Actual' deviates from the forecast or there's a notable revision to the 'Previous' value.

Low Potential Impact
This event is unlikely to affect market pricing unless there's an unexpected surprise or a major revision to prior data.

Surprise - Currency May Strengthen
Actual deviated from Forecast on a medium or high impact event and historically could strengthen the currency.

Surprise - Currency May Weaken
Actual deviated from Forcast on a medium or high impact event and historically could weaken the currency.

Big Surprise - Currency More Likely To Strengthen
'Actual' deviated from 'Forecast' more than 75% of historical deviations on a medium or high impact event and may likely strengthen the currency.

Big Surprise - Currency More Likely To Weaken
'Actual' deviated from 'Forecast' more than 75% of historical deviations on a medium or high impact event and may likely weaken the currency

Green Number	Better than forecast for the currency (or previous revise better)
Red Number	Worse than forecast for the currency (or previous revise better)
Hawkish	Supports higher interest rates to fight inflation, strengthening the currency but weighing on stocks.
Dovish	Favors lower rates to boost growth, weakening the currency but lifting stocks.

Date	Time	Actual	Forecast	Previous	Surprise