Spain’s bond yields hit euro-era high

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Spain’s borrowing costs reached a new euro-era high on Monday as fears about the country’s wilting economy and government finances outweighed the eurozone’s approval of loans to help Madrid recapitalise its banks.
The yield demanded by lenders on benchmark 10-year debt issued by Madrid rose 25 basis points to 7.52 per cent, above the 7.285 per cent peak touched earlier in the crisis, according to Bloomberg data.

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There were records across the yield curve, with Spain’s two-year notes yielding 6.55 per cent and its five-year borrowing costs touching 7.35 per cent.
Credit default swaps on Spain jumped to 632bp, taking the cost of insuring against default on the country’s sovereign debt to new highs.
Yields on so-called haven assets in the UK and Germany were again flirting with record lows. The yields on 10-year gilts hit 1.44 per cent, while 10-year Bunds were trading at 1.14 per cent.

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