Investing.com - Spain saw borrowing costs fell at an auction of two-, three- and four-year government bonds on Thursday, amid expectations that the European Central Bank will announce measures to stem the region’s debt crisis after its policy meeting later in the day.
Spain’s Treasury sold EUR608 million worth of two-year government bonds at an average yield of 2.798% earlier in the day, down from 4.774% at a similar auction last month.
Demand was weaker, with bids exceeding supply 2.01 times versus a "bid-to-cover" ratio of 3.97 in August.
Spain also sold EUR1.43 billion million of three-year debt at an average yield of 3.676%, down from 5.086% at a similar auction last month. The bid-to-cover ratio stood at 1.76, weakening from 2.28 at an auction last month.
The country also auctioned EUR1.39 billion of four-year debt at an average yield of 4.603%, compared to 5.971% at a similar auction last month. The bid-to-cover ratio stood at 1.86, compared to 2.72 at an auction in August.
In total, Spain’s Treasury sold EUR3.5 billion worth of government debt, in line with expectations.
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 eased to 6.26% following the auction, while the euro remained higher against the U.S. dollar, with EUR/USD adding 0.11% to trade at 1.2613.
Meanwhile, European stock markets remained broadly higher. Spain’s IBEX 35 Index rallied 1.45%, the EURO STOXX 50 jumped 1.2%, France’s CAC 40 rose 1.1%, Germany's DAX climbed 1.3%, while London’s FTSE 100 added 0.8%.
Spain’s Treasury sold EUR608 million worth of two-year government bonds at an average yield of 2.798% earlier in the day, down from 4.774% at a similar auction last month.
Demand was weaker, with bids exceeding supply 2.01 times versus a "bid-to-cover" ratio of 3.97 in August.
Spain also sold EUR1.43 billion million of three-year debt at an average yield of 3.676%, down from 5.086% at a similar auction last month. The bid-to-cover ratio stood at 1.76, weakening from 2.28 at an auction last month.
The country also auctioned EUR1.39 billion of four-year debt at an average yield of 4.603%, compared to 5.971% at a similar auction last month. The bid-to-cover ratio stood at 1.86, compared to 2.72 at an auction in August.
In total, Spain’s Treasury sold EUR3.5 billion worth of government debt, in line with expectations.
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 eased to 6.26% following the auction, while the euro remained higher against the U.S. dollar, with EUR/USD adding 0.11% to trade at 1.2613.
Meanwhile, European stock markets remained broadly higher. Spain’s IBEX 35 Index rallied 1.45%, the EURO STOXX 50 jumped 1.2%, France’s CAC 40 rose 1.1%, Germany's DAX climbed 1.3%, while London’s FTSE 100 added 0.8%.