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EvilEdna

Spanish Bond Auction

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http://www.guardian.co.uk/business/blog/2011/sep/20/eu-debt-crisis-italy-downgrade

"The Spanish government just completed an auction of 12 and 18-month government bonds. It found buyers, but had to pay a higher interest rate (yield) to get the sale away.

The yield on 12-month bonds rose to 3.591%, up from 3.335% a month ago. For the 18-month bills, the yield jumped to 3.802% from 3.592% in August."

That seems a hell of a lot to pay for short term bonds.

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http://www.guardian.co.uk/business/blog/2011/sep/20/eu-debt-crisis-italy-downgrade

"The Spanish government just completed an auction of 12 and 18-month government bonds. It found buyers, but had to pay a higher interest rate (yield) to get the sale away.

The yield on 12-month bonds rose to 3.591%, up from 3.335% a month ago. For the 18-month bills, the yield jumped to 3.802% from 3.592% in August."

That seems a hell of a lot to pay for short term bonds.

Does it?

With inflation higher than that, I'd suggest that it's very little. Investors are effectively paying Spain for the privilege of lending them money. The difference is even more astonishing for the UK.

This cannot continue for ever.

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Does it?

With inflation higher than that, I'd suggest that it's very little. Investors are effectively paying Spain for the privilege of lending them money. The difference is even more astonishing for the UK.

This cannot continue for ever.

Yes, but the ECB rate is only 1.5%. In any case Spain's inflation rate is currently around 3 % and 2.5 % for the EU as a whole so there is a small return there, especially if inflation falls as is widely expected (unless they print of course)

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Meanwhile, Italian bond yields are creeping up after the S&P downgrade, 10yr BTPs above 5.70%

Is there any way of knowing whether the ECB are still purchasing? It would be a strange decision to buy them without that knowledge wouldn't it?

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  • 334 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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