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Eurozone crisis live: Spain faces crucial bond auction Eurozone crisis live: Spain faces crucial bond auction
(40 minutes later)
8.48am: Overnight, the International Monetary Fund announced that it has now raised $320bn for its new firewall to protect the world economy from the dangers of the eurozone debt crisis.
Christine Lagarde, managing director of the IMF, said that $34bn of new pledges were received yesterday, including promises of loans from Poland and Switzerland. It means the IMF is now more than half-way to its target of $600bn of new loans from the international community (although the majority of new funding so far comes from the eurozone itself).
Lagarde urged other countries to make their own pledges, saying:
Ensuring that the Fund has sufficient resources to tackle crises and to promote global economic stability is in the interests of all our members.

However, reaching the full target still looks very difficult. America is still declining to contribute more, with Treasury secretary Tim Geithner reiterating yesterday that the US had done its bit.
Here's a list of the commitments that we know about (some amounts are approximate):
• The eurozone: $200bn
• Japan: $60bn
• Sweden: $10bn
• Norway: $9bn
• Denmark: $7bn
• Poland: $9bn
• Switzerland: "a substantial amount" (probably approaching $26bn)
8.23am: In the currency markets, the pound has jumped in early trading. It hit a new 19-month high of €1.2245 against the euro, and a five-month high of $1.6071 against the US dollar.
The trigger appears to be yesterday morning's Bank of England minutes, which revealed that long-time dove Adam Posen had surprisingly ditched his call for more quantitative easing. This means the Banks' Monetary Policy Committee is much less likely to increase its asset purchase scheme in the coming months.
Speaking of Threadneedle Street... a former MPC member, David Blanchflower, has accused governor Mervyn King of ruling the Bank 'like a tyrant'. Writing in the New Statesman, Blanchflower claims:
King has controlled the Bank with an iron fist, slaying any dissenters in his path. He follows in the tradition established by Montagu Norman, who was governor from 1920 to 1944: it's his way or the highway. I recall a meeting in which King told the Treasury representative to tell the then prime minister to shut up. I have never worked at a place that had such low morale.
8.03am: European stock markets have opened higher, with the major indices gaining between 0.5% and 0.7%. Nothing spectacular, but a sign of optimism ahead of the Spanish auction.8.03am: European stock markets have opened higher, with the major indices gaining between 0.5% and 0.7%. Nothing spectacular, but a sign of optimism ahead of the Spanish auction.
7.55am: Here's some early comments from market analysts on the upcoming Spanish auction (see 7.43am for details):7.55am: Here's some early comments from market analysts on the upcoming Spanish auction (see 7.43am for details):
Lyn Graham Taylor of Rabobank: (via CNBC):Lyn Graham Taylor of Rabobank: (via CNBC):
I wouldn't say that Spain is heading the Greece way but definitely we are back in crisis mode. Spanish yields are rapidly on the increase and have been over the last couple of weeks.I wouldn't say that Spain is heading the Greece way but definitely we are back in crisis mode. Spanish yields are rapidly on the increase and have been over the last couple of weeks.
We are really in wait and watch mode now to see what the next steps are that will be taken with regards to helping Spain out, I guess the most unlikely of those being in the first step of bank recapitalisations with the funds potentially coming from the EFSF (The European Financial Stability Facility).We are really in wait and watch mode now to see what the next steps are that will be taken with regards to helping Spain out, I guess the most unlikely of those being in the first step of bank recapitalisations with the funds potentially coming from the EFSF (The European Financial Stability Facility).
Michael Hewson of CMC Markets:Michael Hewson of CMC Markets:
Markets are becoming increasingly worried that in the absence of a much bigger firewall than the one which is currently available Spain will find itself in a similar situation to Greece, only without the luxury of a bailout to fall back on.Markets are becoming increasingly worried that in the absence of a much bigger firewall than the one which is currently available Spain will find itself in a similar situation to Greece, only without the luxury of a bailout to fall back on.
The auction should succeed given the amount but of particular interest will be the yield achieved and bid to cover ratio. Anything above 6% could put downside pressure on the single currency.The auction should succeed given the amount but of particular interest will be the yield achieved and bid to cover ratio. Anything above 6% could put downside pressure on the single currency.
David Morrison of GFT:David Morrison of GFT:
Investors remain nervous...if yields jump back over 6.0 percent, then the European debt crisis will return centre stage, with Spain the leading lady.Investors remain nervous...if yields jump back over 6.0 percent, then the European debt crisis will return centre stage, with Spain the leading lady.
7.43am: This morning's auction will see Spain attempt to raise up to €2.5bn by selling two types of bond – one matures in 2014, and the other in 2022.7.43am: This morning's auction will see Spain attempt to raise up to €2.5bn by selling two types of bond – one matures in 2014, and the other in 2022.
The 10-year bonds will be most closely watched, I think, as long-term debt is seen as a better measure of market confidence.The 10-year bonds will be most closely watched, I think, as long-term debt is seen as a better measure of market confidence.
Analysts will look at four factors when evaluating the auction: how much debt was sold; how oversubscribed the auction was (bid-to-cover ratio); what interest rate (the yield) Spain has agreed to pay; and whether investors favoured the 2014 bond over the 2022 one.Analysts will look at four factors when evaluating the auction: how much debt was sold; how oversubscribed the auction was (bid-to-cover ratio); what interest rate (the yield) Spain has agreed to pay; and whether investors favoured the 2014 bond over the 2022 one.
On Tuesday, Spain held an auction of short-term bonds. Yields jumped, but the auction was still seen as a success because the Spanish authorities actually sold more than their maximum target of €3bn.On Tuesday, Spain held an auction of short-term bonds. Yields jumped, but the auction was still seen as a success because the Spanish authorities actually sold more than their maximum target of €3bn.
7.34am: Here's today's agenda, which shows that France and the UK are also holding government debt auctions this morning.7.34am: Here's today's agenda, which shows that France and the UK are also holding government debt auctions this morning.
• Italian industrial sales+orders data - 9am BST / 10am CET
• Spanish €2.5bn bond auction - from 9.30am BST
• French €11bn bond auction - morning
• UK £1.35bn bond auction - morning
• IMF's Christine Lagarde holds press conference - 1.45pm BST / 8.45am EST
• World Bank's Robert Zoellick holds press conference - 2.45pm BST / 9.45am EST
• Eurozone consumer confidence data - 3pm BST / 4pm CET		• Italian industrial sales+orders data - 9am BST / 10am CET
• Spanish €2.5bn bond auction - from 9.30am BST
• French €11bn bond auction - morning
• UK £1.35bn bond auction - morning
• IMF's Christine Lagarde holds press conference - 1.45pm BST / 8.45am EST
• World Bank's Robert Zoellick holds press conference - 2.45pm BST / 9.45am EST
• Eurozone consumer confidence data - 3pm BST / 4pm CET
7.30am: Good morning, and welcome to today's rolling coverage of the eurozone debt crisis.7.30am: Good morning, and welcome to today's rolling coverage of the eurozone debt crisis.
Spain dominates the attention, with an auction of long-term debt taking place in around two hours time. The sale is a test of market confidence in the Spanish economy and its fiscal plans, following the escalation of concerns over the euro crisis in recent dats.Spain dominates the attention, with an auction of long-term debt taking place in around two hours time. The sale is a test of market confidence in the Spanish economy and its fiscal plans, following the escalation of concerns over the euro crisis in recent dats.
We'll also be watching events in Washington, where the International Monetary Fund and the World Bank are holding another day of meetings to discuss the state of the world economy.We'll also be watching events in Washington, where the International Monetary Fund and the World Bank are holding another day of meetings to discuss the state of the world economy.
And on the economics front, new data will show how eurozone consumer confidence is faring, and the state of Italian industry.And on the economics front, new data will show how eurozone consumer confidence is faring, and the state of Italian industry.