Barrier overcome in Spain at a new auction of short-term government bonds, where finally there was a clear decline in yields after a prolonged series of placements in which they had increased. Meanwhile, Economy Minister Luis de Guindos reaffirmed that the country is solvent and that "there will be no bailout" of Spain: the aid requested from partners in the euro area is limited to the recapitalization of failing banks. Operations that in this situation, De Guindos claims in an interview with the newspaper La Vanguardia, would be difficult for Spain to carry out without support.
Meanwhile, thanks to demand levels that remain very solid, Spain raised slightly more than expected, at €3,562 billion, in a 12- and 18-month bond auction. However, these are relatively short maturities and easier to place. On the first issue, demand exceeded the amount effectively assigned by 2,23 times and average yields dropped to 3,918 per cent, against 5,074 per cent in the previous similar auction which took place on 19 June. On 18-month bonds, rates fell to 4,242 per cent from 5,107 per cent, with a demand of 3,66 times the amount placed, even if in the previous auction the ratio had been 1 to 4,42.
After these results, the Madrid Stock Exchange is maintaining a recovery momentum, plus 1,29 percent of the Ibex 35 which yesterday closed down by almost 2 percent. The other major European Stock Exchanges are also on the rise, but in the meantime the tension that had been recreated on the longer-term government bonds of both Spain and Italy, the two major economies on the periphery of the euro area, continues. Gross yields on outstanding 10-year bonds rise marginally to 6,85 percent, their spread over German Bunds widening to 5,60 percentage points, or 560 basis points. Italy's 6,112-year BTP yields amounted to little movement at 486 percent and the spread on Bunds at XNUMX.
