The profitability of Letters had been declining for monthsdriven by rate cuts made by the European Central Bank. But this trend was broken this Tuesday: for the first time in 8 months, the interest paid by the Spanish Treasury increased compared to the previous auction. The organization raised 4.957 million in 6 and 12 month bills, and for the latter it paid an average interest of 2.61%, exceeding that of last October 1 (when it amounted to 2.579%, its highest level). lowest in almost two years). On the secondary market (where securities are traded after their issue), 12-month bills also experienced a rebound, trading at 2.64% (compared to 2.53% at last week’s close).
If in 12-month bills the Treasury placed 3,440 million euros, at 6 months it managed to raise an additional 1,516 million, at a rate which, on the contrary, was reduced to 2.84%, compared to 2.869% during the previous auction. .
What is currently happening with one-year bills is consistent with what is happening in the secondary market for both bills and bonds. October was unfortunate for fixed income, an asset that saw its worst month since September 2022, in terms of losses that investors had to bear due to prices. The market experienced an oversold in bonds, due to the slowing pace of rate cuts on both sides of the Atlantic. These sales led the yield on an asset like the US 10-year bond to hit a four-month high of 4.38% (it is currently down to 4.32%). The profitability of the Spanish bond over the past decade, for its part, has recovered 3.12%who I hadn’t seen since the beginning of September. Experts explain that the market he braked too much With these declines, they offer good debt buying opportunities. What to do with the US bond, halfway between its best and worst time of the year.
After this Tuesday’s auction, the Treasury will return to the market on Thursdaywhen it will offer investors a new five-year benchmark bond, 30-year government bonds and other inflation-linked bonds with a remaining maturity of nine years and one month. The issuance target of this auction, which will coincide with the Fed rate meeting, is between 3,750 million and 5,250 million euros, according to the agency. Efe.