Bonds: Spain still struggling

Date: Monday 02 Jul 2012

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

Spain: 6.38% (+5bp)
Italy: 5.74% (-8bp)
France: 2.59% (-10bp)
Germany: 1.51% (-5bp)
UK: 1.70% (-4bp)
USA: 1.57% (-8bp)

Italian yields continued their fall following the EU summit last week but Spanish yields rose.

Spain and Italy were seen to be the major beneficiaries of the Brussels summit, with a commitment by the 17 nation euro block to intervene directly to assist Spanish banks, while also easing the requirements for loans to Italy.

Since the meeting both the Netherlands and Finland have said they oppose using bailout money to buy bonds in the secondary market.

Spain may also be suffering from market anticipation ahead of a major debt auction on Thursday when the country will sell bonds of maturities between 3 and 10 years.

BS

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