Spanish stocks and bonds and the euro rallied after the news that Spain sold 3.5 billion euros of bonds easing concern that Spain may face finance problem.
Spain sold 3 billion euros of 10-year debt at an average yield of 4.864%. Demand was almost double that the amount offered. Spain also sold 479.2 million euros of 30-year debt at 5.908%.
Spain is to face debt redemption of 24.7 billion euros in July. It seems that it is trying to convince investors that Spain is in no trouble. Spanish bonds lifted after the sale and the yield premium investors demand to buy the debt over German bonds.
The strong demand for Spanish bonds must help restore confidence. The investors prefer Spanish bonds to German bonds and spread has narrowed to 206 basis point from yesterday’s 221 basis points.
Spain sold 3 billion euros of 10-year debt at an average yield of 4.864%. Demand was almost double that the amount offered. Spain also sold 479.2 million euros of 30-year debt at 5.908%.
Spain is to face debt redemption of 24.7 billion euros in July. It seems that it is trying to convince investors that Spain is in no trouble. Spanish bonds lifted after the sale and the yield premium investors demand to buy the debt over German bonds.
The strong demand for Spanish bonds must help restore confidence. The investors prefer Spanish bonds to German bonds and spread has narrowed to 206 basis point from yesterday’s 221 basis points.
The euro has fallen more than 13% this year on concern of increasing budget deficit. The euro raised today to $1.2378 from $1.2311.
Banking stocks rose after reports that the central bank of Spain will publish stress tests on lenders.
European leaders are to meet at Brussels support high-deficit European countries like Spain. But Spain has refused to take any help and said there is no problem for July redemption.
It must be noted that Spain’s debt burden is lower than in Germany or France. Public debt was 53% last year compared to an average of 79% for eurozone.
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