Spain’s bonds drop for third day


Spain’s government bondsSpain’s government bonds declined for a third day before the nation sells as much as €4bn of securities tomorrow, when European Central Bank policy makers meet to set interest rates.

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Bloomberg News reported that Italian securities also dropped as the nation sold €22.3bn of inflation-linked bonds to individual investors.

Benchmark German bunds were little changed as a report showed factory orders increased in September and the nation auctioned five-year notes.

Bank of America Corporation, Royal Bank of Scotland Group Plc and UBS AG predict the ECB will cut its benchmark rate this week. Spain plans to offer debt due in five, 10 and 13 years on Thursday.

“Spanish bonds have cheapened before the sale tomorrow and I don’t think the market will have any problem taking the supply down despite some uncertainty about the ECB,” said Peter Chatwell, an interest-rate strategist at Credit Agricole Corporate & Investment Bank in London. “Our view is that the ECB won’t do much tomorrow. They will probably want to wait until they get new economic projections next month.”

The yield on Spanish 10-year bonds rose five basis points, or 0.05 per centage point, to 4.15 per cent as of 5pm London time. The 4.4 per cent security due October 2013 fell 0.37, or €3.70 per €1,000 face amount, to 102.01.

Spain last sold 10-year debt on October 3 at an average yield of 4.269 per cent, compared with 4.503 per cent at a previous auction on September 5.

Babatunde Akinsola
Babatunde Akinsola
Babatunde Akinsola is aNaija247news' Southwest editor. He's based in Lagos and writes on the Yoruba Nation political issues, news and investigative reports

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