Spain Bonds Rise After Debt Auction on ECB Stimulus Optimism

  • German bonds climb as oil, stock markets pare their gains
  • ECB account shows officials considered preemptive action

Spanish government bonds advanced for a second day as the nation sold 3.7 billion euros ($4.1 billion) of debt, and investors clung to expectations that the European Central Bank may boost stimulus.

The securities climbed with those of Portugal as an account of the ECB’s January policy meeting published Thursday showed officials debated whether the risk of a global slowdown warranted preemptive monetary stimulus. Germany’s bonds increased as oil prices and stocks pared their gains.

Spanish bonds have trailed behind higher-rated benchmark German debt this year as the Iberian nation has struggled to install a government almost two months after inconclusive elections.

“Euro rate moves reflect an expectant market in terms of ECB action,” said Orlando Green, a fixed-income strategist at Credit Agricole SA’s corporate and investment-banking unit in London. Germany’s surge “seemed to occur with lower equities,” he said.

The yield on Spain’s 10-year bond fell four basis points, or 0.04 percentage point, to 1.70 percent at the 5 p.m. London close. The 2.15 percent security due in October 2025 gained 0.315, or 3.15 euros per 1,000-euro face amount, to 103.97. The yield has slid from 1.85 percent on Feb. 11, the highest in a month.

Spain’s Treasury sold securities maturing between 2019 and 2026. The maximum target was 4 billion euros.

Portugal’s 10-year bond yield decreased eight basis points to 3.40 percent, while that on German bunds fell five basis points to 0.22 percent.

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