Markets continue to hammer Spanish debtJuly 24th, 2012 - 12:38 pm ICT by IANS
Madrid, July 24 (IANS/EFE) The yield on Spanish 10-year bonds rose Monday to a prohibitive 7.49 percent amid fears that nothing short of massive intervention by the European Central Bank can relieve the pressure on Madrid’s sovereign debt.
Spain’s risk premium, the extra return investors demand on Spanish bonds compared with equivalent, safe-haven German debt, reached 640 points Monday before dropping back to a still-record 632 points by the close of trading.
The Madrid stock market’s benchmark IBEX 35 index dipped more than 5 percent before recovering to end the day down 1.1 percent, helped by Spanish regulators’ decision to revive a ban on short-selling that had been lifted in February.
The announcement boosted shares of Spain’s troubled banking sector.
Traders in Madrid were also encouraged by word that European Commission President Jose Manuel Durao Barroso and ECB chief Mario Draghi held talks Monday on additional steps the European Union could take to address the crisis.
The ECB stopped buying Spanish debt in February and has been unresponsive to pleas for action to ease the pressure on Spain in financial markets.
While ruling out any need for a broader rescue of the Iberian nation, Spanish Economy Minister Luis de Guindos called for moves to combat “the irrationality in the markets”.
Easing the concerns of markets “is beyond the capacity of (individual) governments” and requires effort from international institutions, he said.
Observers say investors are worried about Spain’s ability to meet EU-mandated targets for deficit reduction given the financial weakness of Spanish regions such as Valencia, which recently sought help from Madrid.
Even the Eurogroup’s approval of up to 100 billion euros ($122 billion) in aid for struggling Spanish banks failed to reassure the markets, according to analysts at Self Bank.
- Yield on Spanish bonds climbs up - Jul 10, 2012
- No more cuts coming, says Spanish minister - Aug 06, 2012
- Spain auction sees lower borrowing costs for benchmark bond - Sep 21, 2012
- Spain sells 3.2 bn euros in bonds at higher rates - Apr 18, 2012
- Spain's risk premium hits euro-era record - Jul 20, 2012
- Spanish economy contracts - Jul 31, 2012
- Markets hammer Spanish bonds - Aug 03, 2011
- Spain blames Europe growth concerns for debt-risk premium rise - Apr 06, 2012
- EU needs fiscal, bank integration: Spanish PM - Jun 06, 2012
- EU must be more decisive to protect euro: Spain, France - Aug 31, 2012
- Spain's borrowing costs rise sharply in bond auction - May 18, 2012
- Eurozone agrees to bail out Spanish banks - Jun 10, 2012
- Spain raises 2.59 bn euros in bond sale - Apr 05, 2012
- Spain pays sharply lower yield on 10-year bonds - Jan 20, 2012
- Moody's cuts credit ratings of 16 Spanish banks - May 19, 2012
Tags: 10 year bonds, banking sector, deficit reduction, ecb, economy minister, european commission president, financial markets, financial weakness, iberian nation, international institutions, irrationality, jose manuel durao barroso, mario draghi, massive intervention, risk premium, safe haven, sovereign debt, spanish banks, spanish economy, spanish regions