Spanish Sovereign

Spain is set to become the first eurozone periphery sovereign to test benchmark demand since the European Central Bank brought a series of new dovish measures to the market last week. The sovereign mandated banks for a new benchmark amid strong auctions elsewhere in the periphery on Wednesday afternoon.

Eurozone periphery sovereigns are set to waste no time in taking advantage of a sharp tightening in their spreads in the wake of last week’s European Central Bank meeting, with a series of auctions in the pipeline over the next few days and Spain rumoured to be considering a new 10 year benchmark.

There can be few doubts that eurozone periphery yields are going to keep on their almost relentless journey downwards since the start of the year after Mario Draghi delighted the finance world with a series of measures that only the most optimistic of market watchers could have predicted. But with more and more investors starting to take profits as pricing recovery catches up with real economics, there may well be at least a slowdown on the cards.

Read on to see how selected benchmarks are faring in secondary. Trading levels given are bid-side spreads versus mid-swaps and/or an underlying benchmark as of Thursday's close. The source for secondary trading levels is Interactive Data.

Spain breezed through an auction on Thursday morning, cutting its borrowing costs before a European Central Bank announcement in the afternoon that is expected to boost demand for peripheral Eurozone debt.

Portugal suffered a sell-off on Monday, making it the only periphery sovereign not close to or already having had reversed losses racked up during a sell-off in mid-May. Spain, on the other hand, could break records at an auction of three year and five year debt later this week, as the sovereign’s secondary yields stayed at euro-era lows first reached last week on Monday.

Read on to see how selected benchmarks are faring in secondary. Trading levels given are bid-side spreads versus mid-swaps and/or an underlying benchmark as of Thursday's close. The source for secondary trading levels is Interactive Data.

This week's scorecard covers the funding progress of sovereign issuers, with every issuer with a funding year that matches the calendar year either over the halfway mark or approaching it. Next week's scorecard will deal with European supranationals and agencies.

Read on to see how selected benchmarks are faring in secondary. Trading levels given are bid-side spreads versus mid-swaps and/or an underlying benchmark as of Thursday's close. The source for secondary trading levels is Interactive Data.

Cassa Depositi e Prestiti built a more than doubly oversubscribed book with a new May 2021 line on Thursday, despite turbulence in the Italian government bond market. Meanwhile Spain — which has also suffered volatility in secondary trading over the past few days — was able to cut its funding costs at an auction.

Eurozone periphery sovereigns’ spreads over Germany widened on Thursday afternoon, putting at least a temporary break on a big rally by the countries’ debt this week. The turbulence came after a steady bill auction by Ireland in the morning.

Investors flooded in to Spain’s debut inflation linked bond on Tuesday morning, as the sovereign received more than €20bn of orders in just one hour.