Disagreement among European policymakers on Greece and the handling of the Eurozone's debt crisis helped push 18-month Spanish Treasury-bill yields to 9-year highs today. Spain sold €4.4bn of 12- and 18-month T-bills. Concerns that little progress would be made at a Eurozone meeting on Thursday has spooked fixed-income investors, sending debt costs for large peripheral economies Spain and Italy to euro-era highs on Monday.
Spain will face a still tougher test of investor appetite when it seeks to borrow over a much longer term on Thursday, issuing up to €2.75bn in 10- and 15-year bonds. Ten-year bond yields in Spain fell back slightly on the secondary market Tuesday, though held near the peak of 6.31%t with a move above 7.0% unsustainable for the Eurozone's fourth largest economy.
The Treasury sold €3.8bn of the 12-month T-bill, paying an average yield of 3.702% v 2.695% at the previous auction last month. The marginal yield of 3.76% was the highest level in a primary auction since 2008. The 18-month bills sold at a 3.912% v 3.260% at the previous outing, with €661m auctioned at a bid-to-cover ratio of 5.5, up from 3.9 last month.
About the author: Markets.com
 |
