Italy short-term debt sale gets away at 5.952%

Italy’s government managed to sell €7bn worth of 12-month paper in today’s sovereign bond auction, at a price of 5.952%, which was down from last month’s record price of 6.087%.

The country is expected to auction off up to €3bn worth of five-year paper on Wednesday this week.

However, the successful auction today is not being seen as a harbinger of better times ahead for those responsible for European debt issuance.

While there was an improvement in the price for Italian short-term debt, it is still close to the 6% level, which traders said was unsustainable, reported Reuters.

Looking at prices of traded Spanish, Italian and Belgian bonds, Bloomberg reported that the market was acting as if it were not impressed by last week’s European summit.

Yields on 10-year Italian debt climbed 37 basis points, or 0.37% to 6.73% as of 1.13pm UK time (14.13 CET).

Two-year note yields advanced 0.2% to 6.15%.

The yield on 10-year Spanish debt gained 0.25% to 6%. This is the first time that it has hit the 6% rate since 1 December.

The yield on 10-year Belgian debt added 0.1% to 4.65%.

By contrast, German 10-year debt yields dropped again by 0.9% to 2.06%. The two-year rate fell 0.05% to 0.28%.

The spread between German and French debt also expanded by 11 basis points to 123 basis points on 10-year paper. Similarly, the gap to Austrial debt widened by 6 basis points to 112 basis points.

 

 

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