Spain’s five-year and 10-year borrowing costs fell to the lowest in over two years at a debt sale today suggesting Italy’s political stalemate hasn’t yet affected confidence in the euro-area’s fourth largest economy.
Spain’s borrowing costs fell at a debt sale today after Prime Minister Mariano Rajoy said the nation weathered the worst of its crisis, pushing the yield on Spain’s 10-year benchmark bond down on secondary markets.
Portugal’s 10-year government bonds dropped for the 11th consecutive day after Moody’s Investors Service lowered the nation’s credit rating for the second time in three weeks amid expectations it will need a bailout.
Greek Prime Minister George Papandreou’s decision to seek a bailout for his nation before the terms of the aid package are defined shows he’s willing to do “whatever it takes” to get the funds, BNP Paribas SA said.
Spain sold bonds today in the first test of whether Europe’s efforts to boost the firepower of its rescue fund are persuading investors to become more discriminating about which countries will avoid bailouts.
Spain’s five-year borrowing costs surged as the government pushed through spending cuts in the face of public protests, while France paid record-low yields of less than 1 percent to sell securities of the same maturity.