Government bonds

Spain's 5-year bond yields hit a new euro-era high at a disappointing auction today as investors cast doubt on the country's ability to repay its debt.

SocGen permabear Albert Edwards has said the S&P 500 is in danger of breaching a crucial support level, a move that may coincide with US 10-year treasury yields moving below 1%.

Brian Hess, manager of the $998m Legg Mason Brandywine Global Fixed Income fund, has upped exposure to Mexican and South African government debt to drive returns in volatile markets.

Ten-year US Treasury bonds were sold at a record low yield at auction yesterday, as fears that the US economic recovery is fading mounted.

Spanish 10-year bond yields have shot above the 'unsustainable' 7% mark, ahead of a crunch meeting between European finance ministers this afternoon.

Yields on 10-year Spanish government bonds are close to unaffordable, Spanish Prime Minister Mariano Rajoy has told his parliament ahead of this week's all-important EU summit.

Henderson Global Investors' bond fund manager John Pattullo said the current crisis in Spain will result in Spanish bank bondholders taking severe haircuts, after a similar scenario in Ireland last year.

Spanish government bond yields have shot through the danger level of 7% as fears grow its debt could soon be rated as junk.

The yield on Spanish government debt is racing higher this afternoon despite the move by the European authorities to spend €100bn bailing out the country's banking system.

Asian markets fell more than 1% in some regions overnight, with the wider area set for its biggest monthly drop since the financial crisis of 2008.