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Spain's debt costs jump

Tuesday, April 17, 2012 - 01:24

April 17 - Spanish borrowing costs jumped at a debt auction on Tuesday but the sale went smoothy and investors are now looking ahead to a key longer-term auction on Thursday. Sonia Legg reports.

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There was a little respite at the latest auction of Spanish debt - demand for 12 and 18 month bills was solid. But the Spanish Treasury's borrowing costs jumped - bond yields were almost double what they were last month. Daniel Alvarez is from XTB Brokers. (SOUNDBITE) (Spanish) DANIEL ALVAREZ, XTB BROKERS, SAYING: "We cannot say it was a good auction, but demand was much higher than expected." On Monday 10-year- bond yields hit a five month high above six per cent. Domestic banks have been the main buyers so far this week - international investors continue to steer clear of Spanish debt. Talk of the euro zone's fourth largest economy needing financial support from its partners persists. But William Hobbs from VP Research says he's confident the government will be able to climb its "fiscal mountain" (SOUNDBITE) (English): WILLIAM HOBBS, VP RESEARCH - ECONOMICS AND STRATEGY, SAYING: "Spain is not Greece. It has a viable, albeit open to reform economy, and they have globally respected businesses and an economy which we think will eventually see it through these dark times to come." Spain will take comfort from the fact that it has now sold almost half this year's debt. But another auction of key longer-term bonds on Thursday will be closely watched. Sonia Legg, Reuters.

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Spain's debt costs jump

Tuesday, April 17, 2012 - 01:24