Today at the center of the spread alarm is the Spain. The differential between the 10-year Bonos and the corresponding German Bunds has reached its peak 367 basis points, to then drop back to 361 points. The main reason for this surge was the change in the reference title. In fact, from today the benchmark will be the bond maturing in January 2022, which the Treasury of Madrid placed yesterday for 3 billion at 5,54%. The new bond, having a longer maturity, also has a higher yield and, as happened in Italy, the value of the spread was negatively affected.
It is also true that the latest data does not reveal any reassuring news about Spain. According to preliminary values from the International Monetary Fund, in 2012 the Spanish GDP should score a -1,7%, to continue in the red also in 2013 with a -0,3%. Also this morning the Treasury Minister, Cristóbal Montoro, stated that he is not sure that Madrid will reach the target of a deficit-to-GDP ratio of 4,4% this year.
The news from our country is more reassuring, where there is great expectation for the outcome of the Council of Ministers which will have to approve or not the decree on liberalisations. The spread with German Bunds fell below the threshold of 450 basis points and around 14.00 it marks 436 bps with securities maturing in March 2022 at 6,28%.
Even in France, the Oat-Bund gap is slightly down, at 117 bps, after closing at 151 points a week before the fateful downgrade by Standard & Poor's.
