The Treasury is cutting the profitability offered to investors by investing 1 billion 976 million liras in 3- and 9-month bonds.

Investor demand once again exceeded the amount placed on the markets At Tuesday’s auction, bids exceeded 4 billion 957 million euros; This amount is more than twice the agreed amount.

The ministry under the Ministry of Economy invested 502.08 million euros in 3-month bonds against a demand of 1,687.35 million euros, and the offered marginal interest was 3.580%, below the 3.590% in the previous October auction. The highest percentage was reached since November 2011.

Treasury’s grant of 1,473.97 million euros in 9-month maturity bonds, Less than half of the 3,270.27 million demanded by investorsConsidering that this reference was launched in February 2013, with a marginal profitability of 3.705%, below the 3.818% presented in the previous issue, where the highest level on record was achieved.

Retail investors continue to show great interest in purchasing debt, mostly in the short term, given its high profitability that has increased since the beginning of 2022.

In fact, households and private nonprofit organizations that serve households are no longer The Treasury bill, which was 35 million euros in August 2022, increased to 20 billion 348 million euros in August 2023They have become the largest holders of such short-term debts, according to the latest data published by the Bank of Spain.

The high profitability of short-term securities had a very significant impact on the distribution of Treasury bill stocks; Here, households and non-financial institutions increased their participation significantly last year, from 0.04% in August. 2022 to 28.7% in August 2023.

Bonds and bonds will be auctioned on Thursday

The auctions held these days marked the European Central Bank’s (ECB) decision to leave interest rates unchanged after ten consecutive increases. In addition, the US Federal Reserve (Fed) chose to maintain interest rates for the second time in a row.

On Thursday, the Treasury plans to put up between 4 billion and 5 billion euros in an auction that will close the month’s issuance. Specifically, it plans to auction 3-year government bonds with a 2.80% coupon; 10-year State obligations with a 3.55% coupon and 20-year State obligations with a 3.45% coupon.

Historical returns for these references 3-year government bonds stood at 3.533%; 4.074% for 10-year State obligations and 4.007% for 20-year State obligations.

2023 predictions

This year, gross issuance by the Public Treasury will be 256 billion 930 million euros. 8.2% increase compared to forecast for 2022Due to the increase in interest rates.

Regarding net issuance, the Government announced that it will be reduced by 5 billion euros by 2023, thanks to the “good performance” of the Spanish economy and “loose” compliance with fiscal targets. Thus, Spain’s net debt issuance is expected to increase from 70 billion euros to 65 billion euros.