FRANKFURT (MarketWatch) -- Spanish government bonds trimmed earlier losses, with the yield on the 10-year Spanish government bond ES:10YR_ESP +0.56% slipping back below the 6% threshold after stronger-than-expected U.S. retail sales data boosted global risk appetite, analysts said. The 10-year yield was seen at 5.97% in recent action, up 0.04 percentage point, after spiking to nearly 6.17% in earlier activity. Spain's IBEX 35 stock index XX:IBEX +0.91% reversed an earlier loss to rise 1.1% on the day. The overall rebound was spurred by a stronger-than-expected 0.8% rise in March U.S. retail sales, said Nick Stamenkovic, fixed-income economist at RIA Capital in Edinburgh. A key test still looms when the Spanish government auctions bonds on Thursday, he said. Domestic demand will be crucial for a successful auction with nervous international investors likely to stick to the sidelines, he said.
