The Treasury will hold an auction on Tuesday, February 7th. six and twelve monthly bills At a time when retail investors are showing great interest in borrowing this type of debt due to its high profitability that has been growing since the beginning of 2022.
Currently, the marginal yield of the six and twelve month bonds is close to 3%, thus attracting the attention of individual investors. Specifically, in the last issue of this type, Marginal interest is 2.599% for 6-month maturities, 2.998% for 12-month maturities, At their highest level since August 2012. Quarterly bonds are currently yielding 2,198% and nine-month bonds are posting 2,839%.
It should be noted that as of Tuesday, February 7, an appointment request will be required. Direct Accounts Following the long queues observed at the organization’s headquarters for the Bank of Spain to purchase government bonds these days due to their high profitability.
Borrowing can also be done through the Treasury website. ‘securities trading service’, as well as in financial institutions (banks or savings banks) and securities companies and agencies.
“Small savers are not economists, but they usually know where to invest their money. Demand for Treasury bonds is increasing given the low profitability offered by banks, inflation that has literally eroded the value of their savings, and the guarantee of public debt.” “, Professor of Business and Management Degree at VIU explained Thomas Gomez.
Profitability more than 3.5%
The Treasury will return to the markets on Tuesday after holding the first auction of February. 6,499.35 million euros, four references issued to investors at the highest rates. As a matter of fact, the profitability of 20-year government bonds managed to exceed 3.5%.
All this in a context marked by successive rate hikes by both the Fed and the European Central Bank. As a matter of fact, the last decision of the European Central Bank (ECB) Board of Directors this week was to raise interest rates by 50 basis points to 3% for refinancing operations. deposit rate It will reach 2.50% and the loan facility will reach 3.25%.
beside him, he Federal Open Market Committee The United States Federal Reserve (Fed) also decided this week to approve a 25 basis point increase in the country’s interest rates until it places it within a target range of 4 to 4. , 50% and 4.75%, as reported this Wednesday.
Rising interest rates in the bond market bond depreciation and attracting capital. Gómez added that a significant part of international capital movements are due to this factor, which has an impact on the exchange rate.
2023 Treasury targets
According to the 2023 General Government Budget (PGE), gross issuance will be made by the Treasury this year. 256,930 million eurosIt represents an 8.2% increase over the 2022 forecast due to the increase in interest rates.
The Treasury’s net debt in 2023 will remain at 70,000 million. Breakdown by instrument types, Treasury Bills are expected to provide 5,000 million net negative financing, so Government bonds and liabilities will contribute to the economy, along with the remaining euro and foreign currency debt. remaining 75 billion.