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The Spanish risk premium is below 100 basis points again. It had been two months since the gap between Spanish and German bonds for a decade had not dropped below a hundred. The de-escalation has had its effect along with the bazooka of purchases from the European Central Bank (ECB) but Portugal has an advantage.

For the first time in the past eight weeks, secondary debt market investors require Spanish bonds a higher return than that of the ‘bunds’ it does not reach the percentage point of difference. The papers issued by the Public Treasury set intraday lows at 0.54%, while the Germans are quoted at rates of 0.45%.

The current profitability of Spanish bonds is in line with the one they marked two months ago, when the premium resumed the path above 100 points, however, in the last month the fall is no less than 40%. In the meantime, the performance of the ‘bunds’ has grown by 5.6% since the end of March. A disparate behavior that explains the convergence that has been reached this Friday.

Portugal leads the decline

However, the fall in the Spanish risk premium has not been an isolated event. Furthermore, it was not the most significant either. The gap between the bonds issued by Portugal, a country that has managed to keep the coronavirus more at bay with less severe economic restriction measures than its Iberian neighbor.

The bonds issued by Lisbon offer a return of 0.53% this Friday, which leaves the risk premium at 93 points. With today’s session, The Portuguese roles already add two consecutive with the differential against the Germans below one hundred.

Goodbye to the ‘sorpasso’

Both bonuses Italians as the Greeks get off the 200 basis point mark. In addition, those issued by Rome return to offer a more bearable profitability than those of Athens: 1.45% vs. 1.51%. Some percentages that translate into differentials of 189 and 195 points compared to the German papers.

The ‘sorpasso’ that occurred at the height of the epidemic in the transalpine country is backing off.

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