Spanish 10-year bonds hit euro-era highs on Thursday morning surging to 7%, a level considered unsustainable by many economists. The spike in yields followed Moody’s decision on Wednesday to slash Spain’s sovereign debt rating to one notch above junk status. The Spanish downgrade and subsequent uptick in yields led to higher borrowing costs for Italy, with yields on three-year bonds rising to 5.3%, up from 3.9%. On Wednesday Moody’s also downgraded Cyprus’s government bond ratings two notches, citing heavy exposure to beleaguered Greek banks.
Via BBC News.
