LONDON, Oct 11 (Reuters) - 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.