Spain's short-term borrowing costs rise sharply

Spanish short-term borrowing costs have risen substantially in its latest debt auction, reflecting the country's struggle to service its debts at a sustainable level.

At the auction, the Spanish government sold €3bn of 3-month and 6-month treasury bills, at the upper end of its target range, but yields rose significantly. The yield on 3-month debt rose from 0.8% to 2.4%, while the 6-month yield jumped 1.7% to 3.2%. Demand also cooled, with the bid-to-cover ratio on 3-month debt falling at 2.6 from 3.9, while the 6-month fell from 4.3 to 2.8. The poor sentiment was also mirrored in the Italian auction, although yields did not spike as sharply. The Italian government sold €2.9bn of two-year paper, at a yield of 4.7%, up from 4% in its previous ...