Bonds:Spanish yeilds fall further on successful auction

Date: Thursday 21 Jun 2012

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

Spain: 6.62% (-12bp)
Italy: 5.76% (-1bp)
France: 2.65% (-4bp)
Germany: 1.53% (-8bp)
UK: 1.70% (-7bp)
US: 1.61% (-5bp)

A successful debt auction by Spain and the sense one of the Eurozone bailout funds would be used to buy distressed euro area debt calmed markets on Thursday.

Spain sold €2.2bn euros in bonds with a raft of maturities up to five years. The demand for the debt was high and the amount sold slightly exceeded the country’s maximum target.

This helped yields on 10 year Spanish debt fall for the third straight day.

Investors are also expecting the European Financial Stability Facility to be used to help bring down yields of the most distressed countries (e.g. Italy and Spain) after comments from both the new French President, Francois Hollande, and Benoit Coeure, the French European Central Bank executive board member.

As yet Germany has not agreed to this step.

BS

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