Recently a report suggested that the reduction of the 17-nation euro zone economy is hastening. Following this, on Thursday, despite of rumors about Spain's bailout plans, the country sold out its entire debt in an auction that met with strong investor demand.
The targeted sale for the Spanish Treasury was 4.5 billion euros with three- and 10-year bonds, but it sold it for 4.8 billion euros. During the auction dated Aug. 2, the ten-year bonds were sold at 6.647%; however these were estimated to yield 5.666%.
Such a lower yield clearly states that the investors feel more contented while holding Spanish debt. Considering the pressure on the 17-nation currency bloc, the president of the European Central Bank, Mario Draghi said on September 6 that in order to bring an end to this critic situation, they are all set to buy infinite number of Spanish and Italian government bonds. This is something that subsided the fears for Euro zone.
Now the matter of difficulty for Spain is that according to the government of Prime Minister Mariano Rajoy, help from E. C. B would involve unavoidable strings that they need to avoid. And with the falling yields, this help is not at all required.
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