Bonds: Spain downgrade pushes up yield

Date: Friday 27 Apr 2012

These were the yields and movements on some of the most watched 10 year bonds just before the close in Europe:

Spain: 5.88% (+5bp)
Italy: 5.64% (flat)
France: 3.00% (+2bp)
Germany: 1.70% (+2bp)
UK: 2.12% (+3bp)
US: 1.95% (+1bp)

Spain received a credit rating downgrade while Italy failed to reach its maximum target in a bond auction as Europe’s debt woes continued.

Spain had its rating cut two notches by Standard & Poor’s to BBB+ on concerns the government may be forced to support the weak banking sector.

The country’s unemployment crisis also came under the spotlight after the national statistics office announced 24.6% of the workforce didn’t have jobs, the highest level for 17 years.

Italy sold €5.95bn in bonds including €2.5bn in benchmark 10 year maturities. The maximum target was €6.25bn.

BS

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