MW: Spanish bond yields fall in wake of austerity cuts
By William L. Watts
FRANKFURT (MarketWatch) -- Spanish government bond prices added to gains Thursday, pushing down yields, after Spain announced 27 billion euros ($36 billion) of austerity cuts in its 2012 budget. The yield on the benchmark 10-year Spanish government bond ES:10YR_ESP -1.68% was 0.09 percentage point lower at 5.40% in recent action, according to electronic trading platform Tradeweb, down from around 5.44% ahead of the budget presentation. The yield premium demanded by investors to hold 10-year Spanish bonds over German bunds DE:10YR_GER -0.21% declined 0.08 percentage point to 3.56 percentage points. The yield premium has crept up by more than half a percentage point since early March when the government announced it wouldn't hit its initial 2012 deficit target of 4.4% of gross domestic product, a target that was ultimately set at 5.3% of GDP.
