Sales in the fixed income market tense sovereign bonds. And Spanish debt is no exception to this rule. The Spanish Ten Years Bonus reaches this Tuesday a profitability greater than 3.5% that places the return required by investors in exchange for assuming risk In November 2023. Now, the market considers the possibility that the European Central Bank moderates its drops of types in the face of the increase in defense expenditure in the Eurozone, which enlivens the possibility of seeing profitability increases greater than those seen so far this week.
Europe, which has depended largely on the United States in defense in recent years, is immersed in A Rearme Plan that guarantees your own safety Without intermediaries. This implies Increase defense spending of the main member states of the European Union and even raise the fiscal deficit. That is, ask for more money borrowed or increase the indebtedness of the euro zone.
This is one of the main consequences that increases the perception of the highest risk in fixed income and one of the reasons that They raise the profitability of sovereign bonds. However, the climate of uncertainty of tariffs and macroeconomic data that alert the possibility of a recession in the United States also affect the Spanish debt curve.
As a consequence, the Spanish bonus with ten years increases its performance so far this month by 40 basic points. While all long sections record similar increases so far in March, it is the ten -year reference that records the greatest rebound. “After the historic liquidation last week in the European public debt market, we expect a Short -term volatile lateral movementdue to the rapid evolution of the informative situation and the current uncertainty about the magnitude and financing of the planned fiscal measures, “says the Generali AM bond strategist, Florian Späte.
Although it is the Spanish bonus that notes its particular record with this rebound in yields, it is the German titles that reflect the real fear of the market to a European rearmament plan that entails a disbursement of billions of euros. He German bonus at ten years reaches 2.88% Return That is, it exceeds the interest rate of the European Central Bank in more than 30 basic points and infects the rest of European sovereign bonds.
This has an impact on what countries paid for requesting money to the market. What for an investor is the profitability that will obtain for its acquisition of debt for the issuer (the public treasure, for example) is an expense. According to the analyst in sovereign grades of Scope Ratings, Eiko Sievert, the Expected expenditure of Germany in Defense It would reach 625,000 million euros. According to the expert, the average expiration of the debt is 8 years, so the real impact on the increase in interest expenses (which a state pays for requesting money) “will take to materialize”, beyond the rebound of yields seen today.
But not only the Spanish debt records in the secondary market returns not seen in years. While the rest of fixed income from peripheral countries is tense, the case of ten -year French titles follow their particular path. The debt gala at ten years also exceeds 3.5% (it reached 3.58% this Tuesday) and It is at maximum 2011When Europe was mired in a debt crisis that had a special impact in the countries of southern Europe.
At the moment, the volatility and climate that reigns in the fixed income market is expected since it started 2025 will remain in the short term because Trump’s commercial policy and the next meeting of the Federal Reserve of States (March 19) will affect the entire debt market, according to Bankinter. “That is why we hope that the BCE will choose to keep the types At his next meeting, “according to the firm, which would not contribute to seeing a low bond performance.
From Generali Am Barajan even that in the short term to the bund German marks the 3% that would be to reach levels not seen since 2008. However, the market consensus collected by Bloomberg believes, with data at the end of last week, that the average yield for the second quarter of 2025 is located at 2.7%.
#Debt #market #stress #leads #Spanish #bond #November #maximums
