“Spain’s bonds advanced for a 10th day, the longest run since 2005, after its borrowing costs fell at a debt sale as investors bet the European Central Bank will limit volatility caused by a political stalemate in Italy.
Benchmark Spanish 10-year yields fell to the lowest level since November 2010 after Economy Minister Luis De Guindos said yesterday he expected to see economic growth by year-end. The ECB agreed to an unlimited debt-purchase program to cap borrowing costs of highly indebted euro-area nations in September. Italian bonds climbed for the first time in three days. German bunds rose for a second day after a report confirmed inflation slowed in February.
“We have the ECB backstop and without it we’d be in a more volatile situation,” said Orlando Green, a fixed-income strategist at Credit Agricole Corporate & Investment Bank in London. “It’s a supporting factor for the periphery,” he said, referring to the euro bloc’s most indebted members.
Spanish 10-year yields dropped four basis points, or 0.04 percentage point, to 4.72 percent at 11:02 a.m. London time. The 5.4 percent bond maturing in January 2023 rose 0.305, or 3.05 euros per 1,000 euro ($1,301) face amount, to 105.245.
Spain’s Treasury sold 5.83 billion euros of six- and 12- month securities, beating its upper goal of 5.5 billion euros for the sale, the Madrid-based Bank of Spain said. It sold six- month bills at an average yield of 0.794 percent, down from 0.859 percent on Feb. 12. The 12-month securities yielded 1.363 percent, down from 1.548 percent….”
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