BLBG:Spanish Yield Falls to 2 1/2-Year Low After Auction as ECB Meets
Spanish government bonds rose, pushing two-year note yields to a 2 1/2-year low, as the nation sold more debt than its maximum target at an auction, underscoring demand for higher-yielding euro-region assets.
Italian bonds advanced for a fourth day after a report showed the nation’s services sector contracted less than economists forecast last month. German 10-year bund yields were about four basis points from the lowest since August before the European Central Bank’s latest policy decision, which economists forecast will keep the key refinancing rate at 0.75 percent. France auctioned 10-year bonds at a record-low yield.
“It was a fairly good auction in Spain,” said Michael Leister, an interest-rate strategist at Commerzbank AG in London. “The size sold was above the top of the range. It confirms Spain’s access to funding is very robust and that should support peripheral debt.”
Spain’s two-year note yields dropped 12 basis points, or 0.12 percentage point, to 2.09 percent at 10:44 a.m. London time, after reaching 2.07 percent, the lowest since October 2010. The 2.75 percent security maturing in March 2015 rose 0.205, or 2.05 euros per 1,000-euro ($1,280) face amount, to 101.255.
Italy’s 10-year bond yield declined eight basis points to 4.51 percent. Germany’s 10-year bund yield was little changed at 1.29 percent.
Spain’s Treasury sold 4.3 billion euros of debt due between 2016 and 2021, compared with the maximum target of 4 billion euros. France sold sold 6.97 billion euros of debt, including 2 billion euros of bonds maturing in 2022 at an average yield of 1.94 percent, the lowest on record.
Spanish bonds returned 3.8 percent this year through yesterday, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies. German debt returned 0.4 percent and Italian securities earned 0.8 percent.
To contact the reporters on this story: Lukanyo Mnyanda in Edinburgh at lmnyanda@bloomberg.net; Emma Charlton in London at echarlton1@bloomberg.net
To contact the editor responsible for this story: Paul Dobson at pdobson2@bloomberg.net
