Spanish government bond auction sees strong demand, yields rise across all four maturities, with 5-year yield surpassing 3%

⑴ The Spanish Public Treasury auctioned approximately €6.04 billion of medium- and long-term government bonds on Thursday, with total bids reaching around €13.54 billion. The results were within the expected average range, and the yields of all four issues rose compared to the previous auction, with market demand remaining robust. ⑵ The five-year bonds saw an issuance of about €1.85 billion, with bids totaling around €4.27 billion and a marginal rate of approximately 3.01%, higher than the previous rate of about 2.84%. The seven-year bonds raised around €1.57 billion, with a marginal yield of approximately 3.19% (previously about 3.17%). The ten-year bonds were issued at about €1.9 billion, with bids around €4.53 billion and a marginal rate of roughly 3.55%, exceeding the prior rate of around 3.4%. ⑶ The fifteen-year inflation-linked bonds, indexed to the Harmonised Index of Consumer Prices in the Eurozone, had an issuance of about €730 million, with bids of approximately €1.34 billion, and a marginal yield of around 1.72%, higher than the roughly 1.58% at the last comparable auction. ⑷ In the first auction this Tuesday, Spain issued about €6.22 billion in short-term government bonds. On August 11, auctions for three-month and nine-month treasury bills will be held, while the August 20 auction has been cancelled following the usual summer schedule. The net financing requirement for 2026 is expected to be around €55 billion, unchanged from 2025, of which about €50 billion is medium- and long-term and €5 billion is short-term, bringing the total issuance volume to approximately €285.7 billion—a rise of about 4.2% over the previous year. Attention will continue to focus on how upcoming economic data from Spain and the Eurozone will further influence the shape of the government bond yield curve.