Spain relieved after bond auction

There was relief at the result of Spain's bond auction on Thursday, in which there was strong demand, even though some borrowing costs rose.

Investors showed a healthy appetite for Spanish debt, but demanded a higher premium in an auction that was a key test of confidence in the government as its economy enters a recession.

However, Gustavo Bagattini from RBC Capital Markets says the apparently positive outcome of the auction may be misleading.