Italian, Spanish Government Bonds Fall, Sending Spreads Wider
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Italian and Spanish government bonds fell, driving the extra yield investors demand to hold the securities instead of German bunds to euro-era records, as Europe’s debt crisis intensified.
The drop pushed the yield spread between 10-year Italian securities and similar-maturity German debt to more than 2 percentage points for the first time since 1997. The Belgian yield premium over bunds reached a record after its borrowing costs rose at a sale of 2.8 billion euros ($3.7 billion) of treasury bills. The cost of insuring debt for Italy, Spain, Portugal and Ireland surged to records, stocks and the euro slid and U.S. Treasuries advanced.