Bloomberg News

Spanish, Italian Bonds Snap Gains on Spain Bank Aid Speculation

August 16, 2012

Spanish and Italian government bonds snapped a three-day advance amid speculation Spain needs to receive an emergency disbursement from a 100 billion-euro ($123 billion) bailout package for its banks.

German bunds, Europe’s benchmark government securities, rose before a report that economists said will affirm euro- region inflation stayed at 2.4 percent in July. Bankia group, formed in 2010 from the merger of Spain’s troubled savings banks, will get the first portion of the country’s European Union cash imminently, according to a person familiar with the matter.

The yield on 10-year Spanish bonds rose five basis points to 6.69 percent at 9:27 a.m. London time, after dropping 27 basis points in the past three days. The 5.85 percent security due January 2022 fell 0.3, or 3 euros per 1,000-euro face amount, to 94.225.

Italian 10-year bond yields climbed 10 basis points to 5.87 percent, while the rate on similar-maturity German bunds fell two basis points to 1.55 percent.

To contact the reporter on this story: Lucy Meakin in London at lmeakin1@bloomberg.net.

To contact the editors responsible for this story: Daniel Tilles at dtilles@bloomberg.net.


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