Spanish Bond Auction Goes Off Without A Hitch

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Photo: Getty / David Ramos

Spain just sold €2.54 billion in government debt today, slightly exceeding its target. Yields remained below 6 per cent on the 10-year, but actually fell on shorter-term bonds.The fact that this auction did not go terribly should boost investor confidence in Spain a little, however this auction did not go so well that it should significantly alter perceptions of the country’s debt sustainability or financial sector health.

The results on yields for those bonds:

These results look even better when we focus on those 2.5-year bonds. We argued yesterday that yields on this denomination of debt is more important than yields on the 10-year.

Even so, the IBEX has been falling since those results were announced and yields on 10-year bonds have moved higher.

France also sold €7.98 billion euros in sovereign debt, with yields on 5-year notes rising from 1.78 to 1.83 per cent. It paid slightly less than it previously had to borrow on various short-term securities.

CHART: Why Everyone Was Freaking Out Over Spain’s Bond Auction Today >

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