Sovereign core as well as peripheral debt clearly trended upwards last week. It was especially significant the descent of Spain’s 10-year-bonds’ yield under levels of 3%, which means its record low. Italian and Portuguese public debts’ performances also improved, this last thanks to their accounts approval by the EU Troika.
On the other hand, the German Bund was favored as refugee asset after the worsening of Ukraine’s situation. The bonds market is to be supported by next Thursday’s Spanish auction and also the ECB’s meeting in which Mario Draghi might announce some unconventional measure such as a purchase program similar to those of US and Japan. Just in the case things would not happen this way, Spain’s bonds yield could touch again 3%.
Spanish analysts at Bankinter were almost the only ones who bet on buying Spanish debt when it was at its hardest times in year 2012. It was a singular recommendation then, and on Monday they counterbacked with another unusual idea of giving up purchasing the country’s sovereign debt on the grounds that it gave its best in this two years time. Since they introduced this strategy at the end of 2012, Spain’s benchmark securities reduced from more than 5.5% to less than 3%.