Spanish yields tumble amid QE chatter

Spain stamped down its funding costs by 20bp-30bp as it slightly overshot its maximum €5.5bn target at an auction on Thursday. The drop in yields was evidence of a recent strong run for eurozone peripheral sovereigns’ debt, which some analysts believe is the result of investors’ expectation that the European Central Bank could soon start quantitative easing. Elsewhere, Italy kept yields near euro-era lows at an auction of two year zero coupon paper and outlined its auction business for next week.