A clutch of successful eurozone sovereign bond auctions sparked fresh hopes that this year’s rally can surge on despite uncertainty over Greece.
Spain hailed a €4bn sale of its debt on Thursday as a sign of revived investor confidence in its economic reform programme, while France raised €8.46bn in new debt with ease.
The Netherlands was even able to issue its first bond denominated in dollars, selling $3.3bn, nearly twice its target amount to mainly US investors.
The Dutch launched the dollar bond because it offers cheaper funding. They raised dollars and immediately swapped the money back into euros at favourable rates because of strong demand for the US currency. The extra premium to swap euros for dollars is 71 basis swaps.
The successful Spanish and French auctions were mainly due to buying from domestic banks, which can use cheap loans from the European Central Bank to buy the debt.