Spain under pressure, Italy faces market test |
| Reuters - Apr 20, 2012 |
Spanish and Italian government bonds came under pressure on Friday as Spain's auction this week failed to ease investor concerns over Madrid's fiscal health, while Italy goes to the market next week for the first time since it revised its budget.
Spanish 10-year yields topped 6 percent on Friday before retreating after upbeat German economic data but a break higher was seen likely as investors worried about Madrid's ability to deal with its fiscal problems.
Pressure on Spanish debt grew after a debt auction on Thursday fell short of market expectations. A sustained break of 6 percent in 10-year yields could see borrowing costs accelerate to unaffordable levels which drove Greece, Ireland and Portugal to seek international bailouts.
"Spain remains the main worry and if it breaks decisively 6 percent...that will get markets even more worried because after that there's 7 percent where you get all the memories about Greece and Portugal coming back," Lloyds strategist Achilleas Georgolopoulos said.
Read Full Article from Reuters
- Posted: 2012-04-20 11:33:05
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