Investing.com - Spain saw borrowing costs ease slightly at an auction of 12- and 18-month government bonds on Tuesday, as investors continued to hope that Spain will formally request a bailout in the coming weeks and activate a bond buying program by the European Central Bank.
Spain’s Treasury sold EUR3.4 billion worth of 12-month government bonds at an average yield of 2.823% earlier in the day, down slightly from 2.835% at a similar auction last month.
Demand was stronger, with bids exceeding supply 2.71 times versus a "bid-to-cover" ratio of 2.03 in September.
Spain also sold EUR1.46 billion of 18-month debt at an average yield of 3.0225%, down from 3.072% at a similar auction last month. The bid-to-cover ratio stood at 3.04, compared to 3.56 at an auction in September.
In total, Spain’s Treasury sold EUR4.86 billion of government debt, above the full targeted amount of EUR4.5 billion.
Bond auctions have become key drivers of risk sentiment in recent months, as traders attempt to gauge the ability of indebted euro zone nations to fund themselves.
The yield on Spanish 10-year bonds stood at 5.84% following the auction.
Meanwhile, the euro was higher against the U.S. dollar, with EUR/USD adding 0.42% to trade at 1.3003.
European stock markets remained higher. Spain’s IBEX 35 Index surged 1.4%, the EURO STOXX 50 climbed 0.85%, France’s CAC 40 advanced 0.55%, Germany's DAX tacked on 0.65%, while London’s FTSE 100 edged 0.45% higher.
Spain’s Treasury sold EUR3.4 billion worth of 12-month government bonds at an average yield of 2.823% earlier in the day, down slightly from 2.835% at a similar auction last month.
Demand was stronger, with bids exceeding supply 2.71 times versus a "bid-to-cover" ratio of 2.03 in September.
Spain also sold EUR1.46 billion of 18-month debt at an average yield of 3.0225%, down from 3.072% at a similar auction last month. The bid-to-cover ratio stood at 3.04, compared to 3.56 at an auction in September.
In total, Spain’s Treasury sold EUR4.86 billion of government debt, above the full targeted amount of EUR4.5 billion.
Bond auctions have become key drivers of risk sentiment in recent months, as traders attempt to gauge the ability of indebted euro zone nations to fund themselves.
The yield on Spanish 10-year bonds stood at 5.84% following the auction.
Meanwhile, the euro was higher against the U.S. dollar, with EUR/USD adding 0.42% to trade at 1.3003.
European stock markets remained higher. Spain’s IBEX 35 Index surged 1.4%, the EURO STOXX 50 climbed 0.85%, France’s CAC 40 advanced 0.55%, Germany's DAX tacked on 0.65%, while London’s FTSE 100 edged 0.45% higher.