Spanish bonds slide after auction programme

The Spanish 10-year bond yields climbed to a 2-week high as investors bought 3.37 billion euros ($3.84 billion) of conventional securities in an auction. The Spanish government bonds were sold at a higher yield as compared to previous auction on 17th March. The government bond lost 0.4 pct, yields jumped for 5-days through yesterday, longest run since August last year. 

The Spanish bonds are no-more following the benchmark German bunds this week, the widening in yield spreads has been muted by the ECB’s recently expanded 80 billion-euro monthly buying program, which is supporting securities’ prices across the region.

Spain’s 10-year bond yield was at 1.52 pct as of 10:06 a.m. London time, after rising about 9 bps in the previous 5-days. The yield climbed to as much as 1.53 pct earlier, the most since March 24. The Treasury sold 1.56 billion euros of the securities at an average yield of 1.496 pct versus 1.484 pct at the previous auction. The price of the 1.95 pct security due in April 2026 in the secondary market was 104.005 pct of face value. 5-year note yields were at 40 bps, a jump of about 9 bps from a record low reached on March 30.

The country, which hasn’t had an elected government since an inconclusive election in December and missed its 2015 budget-deficit goal, also sold inflation-linked debt in the auction of securities due between 2021 and 2046.

On the other hand, the investors completely ignored the Spain February industrial output which rose 2.2 pct, lower than the consensus of 3.0 pct as compared to 3.4 pct previous (revised down from 3.5 pct).