The Spanish government sold more than the targeted number of bonds at a bond auction today on short-term debt. Yields fell, helping reduce financing costs. European stocks gained, also helped by improving German investor confidence as reported in the ZEW survey.
The Stoxx Europe 600 Index rose 0.4 percent by 10:10 GMT while the S&P 500 index gained 0.5 percent. The yield on the Spanish two-year note fell 13 basis points to 4.35 percent. The 10-year Italian yield rose eight basis points, after climbing as much as 19 basis points.
The Spanish Treasury sold €4.94 billion of 12- and 18-month bills, more than the intended €4.25 billion, in an effort to raise €3.25 billion. T the 12-month bill auction it ended up selling €3.44 billion at an average rate of 4.05%, down from 5.02% in November. The bid-to-cover ratio was 3.14 times, up from 2.13 in November.
At the 18-month bill auction, the Spanish Treasury sold €1.5 billion of 18-month notes and the average yield was 4.2%, down from 5.2% in November. The auction was covered 4.97 times, which was down from 5.96 times in the prior sale.
Euro remains steady against the dollar since the news, trading at 1.3192 at 10:40 GMT.