European bond yields Thursday painted a picture of a somewhat indecisive market after a number of key areas such as European consumer confidence and U.S. business outlook index from Philadelphia Fed more or less equalized Wednesday’s fluctuations.
In Spain the yield on the equivalent 10-year government bond rose by 8 basis points to 5.72 percent, and Italian benchmark interest rate climbed again after Wednesday's fall to a rate of 4.97 percent, which is an increase of just over 7.5 basis points.
The effect of Tuesday's announcement of a possible impending aid application to ESM from Spain has settled again, though promises from the country's Prime Minister to reduce the budget deficit apparently still is in the mind of investors. The yield on Spanish 10-year government bond was during the afternoon aired at 5.82 percent, but settled late in the day.
Thursday's bond market was during the day also shaken a bit by a French auction of government bonds, which resulted in sales of almost 8 billion euro, when short-term French government bonds with two and four year maturity showed lower interest rates compared to previous auctions, while the 5-year French government bond ended with a slight increase in interest rates.
France 2-year government bond ended the auction with an interest rate of 0.2 percent compared to 0.54 percent at the last auction on 2 June, and the 4-year government bond landed on an effective interest rate of 0.53 percent, which must be compared with the last auction in July, when the rate was at 1.05 percent. The 5-year government bond also took a rise in interest rate to 0.98 percent from an effective rate of 0.86 percent in July.
In Greece, there is little reason to dance zorba of bond interest rate developments - the yield on 10-year Greek government bond jumped 25 basis points to a rate of 20 per cent.
In England and Germany the benchmark government bonds yield took a decreases of 5.5 and 5 basis points. The British 10-year government bond ended up with an effective interest rate of 1.78 percent, while the equivalent German lay on 1.57 percent.
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