Why Spanish bond yield spike may not spell disaster for Europe

clock

Investors have suggested the eurozone crisis has not yet reached another critical stage, despite a €100bn bailout of Spanish banks failing to prevent the country's borrowing costs reaching record highs.

With markets underwhelmed by the bailout package and Moody’s downgrading Spain’s credit rating to one notch above junk, Spanish 10-year government bond yields hit a euro-era record of 7% last Thursday. Having fallen back at the end of last week, 10-year yields rose to a fresh high of 7.1% this morning as investors soured on the results of the latest Greek election. The spread over German debt rose to another euro-era high of over 550 basis points. But Stuart Frost, co-manager of the Enhanced ARC and Cautious Absolute Rate & Currency funds at RWC Partners, said investors should note go...

To continue reading this article...

Join Investment Week

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now

 

Already an Investment Week
member?

Login

Trustpilot