Spanish 10-year bond yields up july 24, 2012

Spanish 10-year bond yields up july 24, 2012 : Borrowing costs for Spanish debt have surged in recent days on the back of reports that more Spanish regions may follow Valencia in asking for government aid. Meanwhile, a Spanish short-term debt auction this morning was successful, with the Treasury managing to meet its target, though yields jumped to the highest levels (for these particular securities) since the introduction of the euro in 1999.

With 10-year Spanish bond yields up a further 11.8 basis points today at 7.616%, speculation is mounting the that the country may need a full-scale bailout some time in the future, regardless of its recent bank recapitalisation aid.

Bund yields in ‘safe-haven’ Germany also rose today, albeit by a less dramatic rate, after ratings agency Moody’s warned last night that the nation – along with the Netherlands and Luxembourg – risks losing its AAA rating. The agency revised its outlooks on the three sovereigns from ‘stable’ to ‘negative’ due to the rising uncertainty regarding the outcome of the Eurozone debt crisis and the increased likelihood of Greece’s exit from the single-currency region.

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