The Italian ten-year Treasury bond also trimmed its position as its yield dropped to 5.68%, its lowest level since October 17, 2011. Drops for both Italian and Spanish bonds, paired with a slight rebound in German bund yields (yesterday it was 1.852%) indicate a possible relaxation of the Spanish and Italian risk premiums.
The risk indicator that measures the level of investor demand for Spanish treasuries in comparison to German treasuries fell to 299 basis points, slightly beneath the psychological barrier of 300 basis points. It has not been this low since October 12. The Italian risk premium slid back to 382 basis points, falling beneath 400 basis points for the first time since December 7.
A breather for Portugal
The Portuguese Treasury carried out a successful sale of three and six-month notes yesterday. At a very critical time for Portugal, for whom the threat of a second bailout is looming, the sale allowed them to meet their objective of 1.5 billion euros at a lower interest rate than the last debt sale. Portugal's risk premium fell from 1,461 basis points to 1,336 basis points.
Stock market gains sprung from soil that was sown on Tuesday after the Greek Minister of Finance, Evangelos Venizelos, declared after markets closed that an agreement with private creditors could occur this week after several days of anticipation.