Tuesday, August 19, 2014

The Treasury auction closes another minimum and approaches the cost … – Diario de Sevilla

The Treasury auction closes another minimum and approaches the cost … – Diario de Sevilla

The Treasury yesterday successfully closed a new issue by placing 4545.82 million in letters 6 and 12 months, offering investors lower interest rates than on the previous occasion and setting new lows as well.

In addition, the agency was able to surpass its goal, as I expected to attract between 3,500 and 4,500 million euros. Demand was high and exceeded 9,100 million long.

In particular, the agency placed the 2396.78 991.78 million demanded by investors in letters to 6 months, so that requests surpassed auctioned 2.4 times (they were 3.9 times in the previous occasion).

The interest of this paper considerably eased and placed back at historic lows, to stay even below 0.1%. Specifically, the average rate of 0.146% passes July to 0.080% today, while the marginal drops to 0.090% from 0.155% previously.

In addition, the Treasury issued the 6739.18 3554.04 million requested by the market in letters to 12 months, so demand exceeds 1.9 times what I sold (they were twice last July). In this case, interest is also moderated from last July and lows marked in the time series. Thus, the average return goes from 0.294% to 0.160%, while the marginal stays at 0.169% compared to 0.302% previously. The new minimum set by the Treasury show, once again, the trust generated Spanish debt despite the possible effect that could have resulted in the national economy slowing some of the trading partners such as Germany, France and Italy. In fact, investors ignored the trade balance figures released Monday by the Ministry of Economy, which showed a deficit of 11,882.4 million at the lower boost exports and the sharp increase in imports.

From the beginning of the year, the Treasury has captured 100.343 million euro funding program within the regular medium and long term. This represents 77.6% of the forecast emission included in the strategy for 2014 average cost of government debt to the issuance stood at 1.81% at July 31, compared with 2.45% closing of 2013.

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