Yields of national debt fall, in line with Italian interest rates, as investors look ahead to the European Commission's recovery plan to be released next Wednesday.
The interest rates on Portuguese debt to fall back on the international markets. Portugal’s ten-year interest rate, the benchmark for the national debt, falls below the 0.7% threshold, returning to the minimum levels of the end of March. Interest rate relief also occurs in the remaining main maturities, with investors paying attention to the European Commission’s recovery plan that will be released next Wednesday.
The Portuguese ten-year yield trades in the secondary market at 0.692%, around two basis points below 0.719% at the end of the last session. The relief follows the downward trend of the last sessions, putting the national debt reference rate at its lowest level since March 30. The drop is also registered in the remaining main maturities. In the five-year term, the yield also drops by about two basis points compared to Monday, standing at 0.142%. At two, the yield becomes even more negative, standing at -0.353%.
The fall in Portuguese interest rates is still in line with the Italians. Italy’s ten-year interest rate fell to 1.56%, standing at its lowest level in almost seven weeks, with the spread against German debt falling below 200 basis points for the first time since mid-April. The Spanish ten-year yield, on the other hand, drops to 0.687%.
The reduction in interest rates for southern European countries comes one day before the European Commission’s recovery plan to deal with the effects of the pandemic is released.