SPAIN sold more bonds than expected yesterday as investors flocked to benefit from the high yields being offered on the debt.
Germany provided more upbeat news with a positive economic sentiment index, and the Bank of Italy published a report showing a healthy outlook for the government’s finances.
The Spanish government sold €3.2bn (£2.64bn) of 12- and 18-month bills, above the €3.0bn initially planned
However, the yield of 2.623 per cent on the one-year debt was up sharply from 1.418 per cent at the last similar sale which took place just a month ago.
Germany continued its solid expansion with the ZEW index of economic sentiment rising to a two-year high of 23.4, up from 22.3 in March.
ZEW economist Michael Schroeder claimed the risks of a recession have receded, putting a 15 per cent probability of a recession in Germany in the next two quarters, down from 30 per cent in late 2011.
However, other analysts were less convinced the economy has such momentum.
“It is unclear this optimism can be maintained given the nature of the Eurozone’s fiscal problems,” warned Capital Economics.