The anti-crisis mechanism devised by the European Central Bank (BCE) manages to reduce the pressure on the risk premium, which is reduced to 121 basic points, from the 137.7 basic points registered on Tuesday, but it does not manage to transmit the same calm to the bond market and the Ibex 35.
The country risk of is thus moving away from its annual highs, it has fallen more than 15 points in 48 hours, but it is still far from the 117 basis points prior to the ECB meeting last week that triggered the increase in the risk premiums of the European periphery and bond yields. Thus, the Spanish continues at levels not seen in May 2020.
The interest rate on the 10-year Spanish bond rises again above 3%, to a maximum of 2014, and is not infected by the new ECB strategy that involves a “flexible” reinvestment of debt maturities in new bonds of the State. Therefore, it will use the achieved debt maturities of more solid countries as Germany o France to increase peripheral purchases such as spain o Italia.
The situation of the interest of the Spanish bond after knowing the new plan of the central bank, which will have relevant requirements for the beneficiary States as it advances in today’s edition OKDIARIO, is not unique. Interest on the German bond at the same term advanced more than 10 percent to 3.8%. The rise is beneficial for the Spanish risk premium since said bond, known as ‘bund’, serves as a reference in the eurozone and the difference with the rest determines the country risks.
Regarding the situation of the debt market, the Spanish Public Treasury It has placed this Thursday 4,510 million euros for which it has had to pay 83% more interest compared to the prices of the previous auction, so Lagarde’s maneuver has not had an effect either.
The main selective of the Spanish stock market, the Ibex 35is listed this Thursday with losses of 1.5%, which means erasing what was gained yesterday, 1.34%, driven by the announcement of the emergency meeting of those of Christine Lagarde and the subsequent announcement, although the indicator was also favored by the strong upward opening of Wall Street that safely discounted the 75 basis point rise in interest rates by the Federal Reserve. Equity investors, according to the experts consulted, remain concerned about stagflation, despite the actions of central banks. In addition, they pay attention to the worsening of economic estimates that would translate into a fall in the profits of listed companies. The rest of the main trading floors of the Old Continent are experiencing the same situation, which the ECB has not filled with optimism either and also lost more than 1.5% on the day.
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