The Public Treasury placed this Tuesday 2,133.65 million euros in a new auction of three- and nine-month securities, within the expected average range. It did so by reducing the yield offered in the two references of Spanish public debt to the lowest levels observed a year and a half ago. This is due to the expectations that the European Central Bank (ECB) will continue to cut interest rates at its upcoming meetingsthe next one being this week (Thursday).
Despite the drop in interest rates, investor demand for Spanish debt securities remains high. It has approached 4.9 billion euros, or more than double what was ultimately awarded on the markets during this third September auction.
In detail, the Treasury granted 693.15 million euros in bond issues for a quarter against 1,740.30 million requested. At the same time, requests for quarterly bonds reached 3,146.01 million euros, of which 1,440.50 million euros were finally placed.
What is the profitability of Treasury bonds?
According to data published by the Treasury itself, the marginal profitability of three-month bills is 2,860%, the lowest since March 2023At last month’s auction it had already fallen to 3.215%.
Similarly, the marginal yield on nine-month bills has fallen again, 3.027%also the lowest level in more than a year and a half (February 2023). In the previous issue, the same type of asset was allocated at 3.15%.
In any case, the interest on three- and nine-month notes continues to exceed the inflation rate in Spain (2.8% over one year in July, the latest data available, according to the National Institute of Statistics). This means that by acquiring this type of low-risk financial assets, loss of purchasing power can be avoided due to the general increase in prices.
