LONDON Oct 11 Yields on Spanish government
bonds turned lower on Thursday as investors bought back into a
cheapened market after a sell-off in early trading following an
overnight downgrade by rating agency Standard & Poor's.
Analysts also said that given the prospect of potentially
unlimited European Central Bank bond-buying, if Spain asks for
aid, it was difficult for investors to have selling positions on
the Spanish sovereign debt market.
Ten-year Spanish yields were down 4.4 basis
points on the day at 5.78 percent, having hit a session high at
5.96 percent earlier, while two year yields were 6
bps lower at 3.26 percent.
"There has been a massive buyer from the U.S. who seems to
have caught the market out. There was some ... selling this
morning after the S&P downgrade but now a lot of people have
been caught short and squezzed. We saw buying at the front end,"
a trader said.