LONDON, June 18 Spanish and Italian financial
assets fell on Monday, with the 10-year Spanish government bond
yield hitting euro-era highs above 7 percent, because of
persistent concern about Spain's fiscal and banking problems.
Financial markets had opened higher after Greece's
pro-bailout parties won a slim majority in the weekend elections
but the relief proved fleeting, with the euro also falling back
against the dollar.
"Markets are looking to fade the relief rally, and Spain is
suddenly blowing out again," a bond trader said.
"It (Spain) looks like it is going to be under pressure
until at least Thursday, but really it is hard to see what can
stop (Spanish yields rising) even then."
Spanish 10-year government bond yields rose 22
basis points on the day to 7.14 percent, their highest during
the euro's lifetime. Greece, Ireland and Portugal were forced to
seek international bailouts soon after their 10-year bond yields
surpassed 7 percent.
Italian 10-year bond yields rose 15 bps to 6.08 percent
. The 10-year Spanish yield premium over Italy rose
to 108 basis points, also a euro-era high, according to Reuters
The Spanish and Italian stock markets both underperformed
the broader European equity market. Spain's IBEX fell
0.9 percent, while Italy's FTSEMIB was down 1.2
percent. The FTSEurofirst reversed early gains and was
last down 0.11 percent.