The Fitch agency speaks out on Spain after the unhappy conclusion of the government bond auction. For now it maintains the rating at AA-, a rating to which it was downgraded on 7 October. The negative perspective is maintained and in a note the New York agency underlines that the new government must prepare "additional measures to achieve the objectives" of fiscal consolidation as soon as possible. Standard & Poor's opinion is also similar, confirming the rating but pressing for new measures.
These are the results of the latest auction in Spain with alarmist results. Despite the new solid majority, the markets do not trust the country, now under the leadership of Prime Minister Rajoy. Most disturbingly, it was short-term bonds that were hit.
Despite the very strong demand, which brought about 3 billion euros into Spanish coffers, the interest rates on three- and six-month bonds rose considerably. Compared to the October 25 auction, yields on three-month bonds rose from 2,292% to 5,110%. On six-month bonds, rates shot up to 5,227% against 3,302%. Not even the stock market is showing positive signs, Madrid is the only one down this morning.
