Bonds: Spanish yields rise above seven per cent

Date: Monday 18 Jun 2012

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

Spain: 7.16% (+28bp)
Italy: 6.06% (+13bp)
France: 2.61% (+3bp)
Germany: 1.42% (-2bp)
UK: 1.66% (-1bp)
US: 1.58% (flat)

The yield on Spanish debt reached record levels on Monday as the market bet that Greek elections and Spain’s own €100bn bailout will fail to ease the ongoing crisis.

The victory of the New Democracy party in Greek elections gave brief hope that the situation in the Eurozone’s most distressed country might stabilise. But concerns it will be difficult to form a coalition in Athens, as the public wearies of austerity, put further pressure on the 17 nation currency bloc.

Spain meanwhile revealed bad loans, as a percentage of total lending within its banking sector, reached 8.72% in April versus 8.37% in March. In other words things are getting worse not better.

Unsurprisingly money flew into German and British debt as investors sought safety over risk.

BS

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