Spanish 10-year bond yields spike above six per cent

The interest rate on Spain’s benchmark 10-year bonds rose above six per cent yesterday, a borrowing rate widely believed to be unsustainable for the crisis-hit Spanish government.

In the morning, yields on the secondary market were 6.026 per cent, up sharply from 5.817 at Tuesday’s close, as investors fretted over the possible fallout of the crisis in Greece where anti-austerity parties made huge gains in general elections on Sunday.

The yield on Germany’s benchmark bonds meanwhile struck a record low of 1.530 per cent in morning trade before rising slightly to 1.531 per cent later.

Investors are flocking to the safety of German sovereign debt amid talk of Greece reneging on commitments to international creditors agreed in return for rescue loans and a debt write-off earlier this year.