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Spain Auctions 4.57 Billion at 2.24 Percent

The Spanish treasury sold on Thursday 4.57 billion euros (5.99 billion U.S. dollars) in treasury bonds, paying lower borrowing costs than in the previous auction.

Particularly, a total of 1.86 billion euros worth of bonds with a three-year lifespan carried an average interest rate of 2.247 percent, which is below the 2.792 percent of the previous auction.

A further 1.55 billion euros’ worth of bonds with a five-year lifespan fetched an average interest rate of 2.789 percent, compared to the 3.357 percent of the previous auction held last April. This is the first time since 2010 the five-year bond interest rate has fallen below 3 percent.

The auction could be considered a success as the Spanish treasury once again placed more debt than the predicted 4 billion euros, while the risk premium in the Spanish secondary market remained below the 300 point mark at 289 points.

Two weeks ago, the Spanish government had lowered its economic forecasts predicting a GDP contraction of 1.3 percent for 2013 compared to the previous 0.5 percent. The government expects Spain will grow by 0.5 percent in 2014. (1 euro = 1.31 U.S. dollars)

via Xinhua [1]

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Alfonso Esparza

Alfonso Esparza [6]

Senior Currency Analyst at Market Pulse [7]
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza
Alfonso Esparza

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