The Public Treasury will return to the markets this Thursday with an issue of State bonds, in which it expects to place between 5,750 million and 7,250 million euros, according to the objectives announced by the body under the Ministry of Economic Affairs and Digital Transformation. Specifically, it will auction government bonds indexed to inflation with a residual life of 4 years 5 months and a coupon of 0.65%; 7-year State bonds, with a 0.80% coupon; 10-year State bonds, with a 3.55% coupon and 50-year State bonds, with a 1.45% coupon.
With a view to this auction, in the last issuances of these references, the marginal interest stood at 0.671% for inflation-indexed government bonds with a residual life of 4 years 5 months; at 3.082% for 7-year State obligations; at 3.556% for 10-year State obligations and at 2.889% for 50-year State obligations. Following this issuance, the Treasury will return to the debt markets on July 11 with an auction of three- and nine-month bills and another on July 20 for government bonds and obligations.
In the previous auction, held last Tuesday, the Treasury placed 5,268.51 million euros in six- and twelve-month bills, within the expected medium-high range, and did so by offering higher yields in both cases and above 3 0.6% All this in a context in which the Governing Council of the European Central Bank (ECB) decided two weeks ago to raise interest rates by 25 basis points, as the market consensus took for granted, so that the interest rate reference for its refinancing operations has been located at 4%, while the deposit rate reaches 3.50% and that of the loan facility 4.25%.
For its part, the United States Federal Reserve (Fed) unanimously maintained interest rates in the target range of between 5% and 5.25% after the ten increases undertaken since March 2022. But the president of the ECB, Christine Lagarde, already detected this week that inflation in the euro zone is too high and will remain so for too long, noting that “it is unlikely” that it can be declared in the near future that interest rates have peaked.
Goals for 2023
The gross issuance by the Public Treasury will be 256,930 million euros this year, which represents an increase of 8.2% compared to the estimate for 2022, due to the rise in interest rates. For its part, the net indebtedness of the Public Treasury in 2023 will remain at 70,000 million. Breaking down by type of instrument, the Treasury Bills are expected to provide net negative financing of 5,000 million, so the State bonds and obligations, together with the rest of the debts in euros and foreign currency, will contribute the remaining 75,000 million.
