Spain is indeed having a good day today. As people celebrate the football triumph over Germany, while others run in front of the bulls in Pamplona, government officials may be breathing in relief about the lower pressure from market jitters.
Following the country's successful bond sale earlier this week, the cost to protect $10bn of Spanish government bonds against default fell by $15,000 to $232,000, an indication that investors have eased their fears about Spain following Greece into a bail-out.
"The bond sale earlier this week was the initial catalyst, and the clarification of the bank stress test criteria has helped sentiment today," said Gavan Nolan, an analyst at Markit.
Spanish officials expect that the forthcoming European Union stress tests on the country's banks and Cajas will highlight their soundness, rather than increase fears about potential weaknesses.
The government of Jose Luis Rodriguez Zapatero expects the results, to be published at the end of this month, will feel like scoring a goal to market speculators (who have scored many times against the Spanish government so far this year.)
To Zapatero, a victory over speculators will feel sweeter than even the World Cup.
