Tim Seymour:  Spain paid significantly higher yields at its most recent bond auction, feeding concerns that central bankers may have to step in to rescue more euro zone economies. 

Madrid sold another $4.7 billion in three- and four-year debt this morning at significantly higher effective interest rates, reflecting traders’ sense that the risk of a Spanish default had only climbed over the last few months.

Today, Spain had to promise investors rates of 4.813% for its three-year paper and 4.984% for its four-year notes. In June, Spain sold similar debt at rates of 4.037% and 2.862%, respectively.

The sharp increase for the longer-term bonds was especially unnerving to traders who had previously hoped Spain’s problems would be fixed relatively soon.

As it stands, the near-parity between the two yields indicates that the markets now believe a crisis could emerge some time around 2014 to 2015.

Meanwhile, 10-year Spanish yields have stuck at 6.1%, well above the 6% level often quoted as unsustainable.

The European Central Bank continues to mull the prospect of stepping in to buy the bonds of Spain and other troubled countries in the euro zone, although no details have been released.

This is pushing up the DXY dollar index by 1.4%.

Take a look at the relative performance of EU and the Powershares U.S. Dollar Bullish ETF (NYSE:UUP) for the longer-term trend:

Written By Tim Seymour From Emerging Money

Emerging Money provides insightful and timely information about the increasingly important world of Emerging Market investments. CNBC Emerging Markets Contributor Tim Seymour leads the team of Emerging Money to bring you cutting edge global news and analysis.

About Tim Seymour: Tim is a founder of Emerging Money. He is a founder and Managing Partner at Seygem Asset Management, and The Emerging Markets Contributor to CNBC. Seygem Asset Management focuses on investing throughout the global emerging markets asset class. With a view that emerging and developing economies will continue to outpace the economic growth and advancement of developed economies, Seymour has devoted a career to investing in the dominant markets of tomorrow, today. Seymour’s career has included significant experience in both alternative asset management (hedge funds) and capital markets, having launched two hedge funds, and built the largest Russian broker dealer in the USA. Seymour started his career at UBS, focusing on international credit (cash, swaps, forex) in a specialized hedge fund group (New York). Seymour completed the firm’s training program after graduating with an MBA in international finance from Fordham University. Seymour received his undergraduate degree at Georgetown University.