New opportunity for the small investor. The Spanish Public Treasury carried out an auction of six and twelve-month bills next Tuesday, the first since the rate hike by the European Central Bank (ECB) that left interest in the euro area at 4.25%.
He allowed the organization to suspend the placement of long-term debt that was scheduled for the middle of the month, so that this August there are only two bill auctions to be held, the one on Tuesday and another on August 16, in this case of titles three and nine months.
Due to their short repayment terms and the high profitability that they offer compared to other financial products with similar security for the investor, the bills are being highly demanded by retail investors.
According to the latest data from the Bank of Spain, the amount of public debt held by households has doubled in one year to reach 1,819 million euros last May.
The Federal (Fed) will begin to raise interest rates and the markets will begin to assume that the ECB would follow the same policy. In this period, the yield on bills of any denomination (three, six, nine and twelve months) has gone from negative figures to over 3.5%.
According to Treasury data, the average rate of the last auction, the same as the one to be held on Tuesday, was 3.599% in six-month bills and 3.775% in one-year bills, while in three- and nine-month bills it was 3.5% and 3.788%, respectively.