Sovereign bond yield differentials continue to narrow

Date: Monday 06 Feb 2012

In the sovereign debt market, Germanto periphery bond yield differentials continue to narrow, while Portuguese and Italian debt carries on improving.

Spain's risk premium is down to 309 basis points, the Italian risk premium is at 379bp, and the Portuguese is at 1,181bp. Looking at what are considered the more financially secure countries in Europe, Germany's 10-year Bond yield is at 1.93%, while France's 10-year yield is at 2.92%.

Meanwhile, Spain has a 10-year bond yield of 5.02% and Italy has a 10-year bond yield of 5.72%.

The US 10-year is at 1.93% and UK's 10-year Gilt is at 2.18%.

The market will be alert to today's French debt auction, where France looks set to issue €7bn to €8bn in new bonds.

FM

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