Investor demand strong at Spanish bond auction

Spain has successfully raised 2.2bn euros (£1.7bn) of bonds repayable in two, three and five years in a debt auction in Madrid.

The yield on five-year bonds rose to 6.07% from 4.96% in May and went up to 5.54% on three year bonds from 4.87%.

The Spanish government debt sale came ahead of the release of the conclusions of two consultants' reports into the recapitalisation needs of Spanish banks, which are expected to be released in the next two days.

Gustavo Bagattini, European economist at RBC Capital Markets, said the investor demand was strong due to the size of the auction, the type of bonds on sale and a sense of optimism ahead of the auditor reports.