- Ten-year securities climb for first time in seven days
- Italian, Portuguese bonds rise along with oil, equities
Spain’s 10-year government bonds climbed for the first time in seven days as a rebound in stocks and a jump in oil prices helped support demand for riskier assets such as Europe’s so-called peripheral securities.
The gains halted Spanish 10-year bonds’ longest losing streak since July 2012, and sent yields down from the highest level in six weeks. Italian and Portuguese sovereign securities also rose Friday even as a lackluster economic recovery, political turmoil and doubts over the strength of some Italian banks’ balance sheets painted a bleak outlook for the region. European Central Bank officials highlighted this week that they remain ready to further ease monetary policy to shield the economy and boost inflation.
“The positive move is driven by other markets,” said Christian Lenk, a rates strategist at DZ Bank AG in Frankfurt. “Oil has been and remains a very important driver. We have seen oil clearly bouncing off the lows we saw yesterday and that’s also taken the equity markets with it. The return of risk-on at the end of the week” is driving peripheral bonds higher, he said.
Spain’s 10-year bond yield fell eight basis points, or 0.08 percentage point, to 1.53 percent as of 4:13 p.m. London time. That pared this week’s increase to nine basis points. The 1.95 percent security due in April 2026 rose 0.72, or 7.20 euros per 1,000-euro ($1,140) face amount, to 103.91. The yield climbed to 1.63 percent Thursday, the highest since Feb. 24.
Benchmark German 10-year bund yields increased one basis point Friday to 0.10 percent. That left the yield difference, or spread, versus the Spanish securities 12 basis points wider on the week at 142 basis points. Similar-maturity Italian bond yields dropped seven basis points Friday to 1.32 percent, while those on Portuguese 10-year debt declined six basis points to 3.35 percent.
Brent crude oil futures climbed 5.7 percent to $41.69 a barrel, while the Stoxx Europe 600 Index of shares rose 1.2 percent.