Spain's bond yield shoots past 6%
The yield on Spain’s 10-year government bonds has shot past the 6% mark as fears rise the country may eventually be obliged to seek a financial bailout.
The rate jumped to 6.10% early today on the secondary market, according to FactSet. It closed at 5.93% on Friday after a week of market tension.
It is the highest rate since the new conservative government took office in December.
Although the government has implemented a barrage of labour and financial reforms, investors remain worried about Spain because banks are saddled with bad loans from a collapsed property market and regions’ have high debts.
The 10-year bond yield surged toward 7% late last year, a rate considered unsustainable for a country over a long period. Greece, Portugal and Ireland had to ask for bailouts after their yields stayed above 7%.
The jitters in bond markets today extended to Italy, viewed as another weak link in the 17-nation eurozone. Its 10-year bond yield rose to 5.60% from about 5.50% on Friday.
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