Spain’s Government Bonds Drop With Italy’s as Nations Sell Debt

Spain’s government bonds declined as the nation sold 5.8 billion euros ($6.5 billion) of debt, in a gauge of demand amid a region-wide selloff that has handed investors a 3 percent loss this month.

Benchmark German 10-year bonds yielded about 1 percent as European Central Bank Governing Council member Jens Weidmann said rising yields were “a rather welcome development insofar as they help to foster risk awareness.” Italy’s bonds slipped before the country auctions debt maturing between 2018 and 2046.

Spain’s 10-year bond yields jumped eight basis points, or 0.08 percentage point, to 2.32 percent as of 9:59 a.m. London time, after rising to 2.40 percent on Wednesday, the highest since Oct. 16. The 1.6 percent security due in April 2025 fell 0.645, or 6.45 euros per 1,000-euro face amount, to 93.745.

Demand, as measured by the bid-to-cover ratio, for the nation’s five-year notes auctioned Thursday dropped to the lowest since July.

Italian 10-year yields rose eight basis points to 2.33 percent. The yield touched 2.42 percent on Wednesday, the highest since Nov. 6.

Germany’s 10-year bund yields rose above 1 percent on Wednesday for the first time since September, up from a record-low 0.049 percent reached as recently as April 17.