The master plan European Central Bank President Mario Draghi presented yesterday may be “meaningless” if it is restricted to buying government debt with maturities of less than a year, said Christoph Rieger, head of interest-rate strategy at Commerzbank AG.
Spanish bonds outperformed their German equivalents with the extra yield on Spain’s 10-year securities shrinking toward the lowest since April 2011 after the nation sold a record amount of debt through banks.
Italy’s five-year notes dropped, pushing yields to the highest level in more than a week, as borrowing costs increased at a sale of 5.9 billion euros ($7.8 billion) of government debt maturing in 2017 and 2022.
The rate banks pay for three-month loans in dollars rose to the highest in almost nine months as Europe’s near-$1 trillion support plan in the wake of Greece’s budget crisis failed to encourage banks to step up lending.
Futures contracts on the euro interbank offered rate, or Euribor, fell after banks demanded less cash from the European Central Bank than some analysts anticipated, suggesting the cost of borrowing may rise.