Milan

Bad German economic data hurts Spanish, Italian spreads

Spanish spread surpasses 500

Bad German economic data hurts Spanish, Italian spreads

(ANSA) - Milan, August 23 - Bad economic data from Germany put renewed pressure on Spanish and Italian bonds Thursday in midday trading. The spread between 10-year Spanish bonds and the German benchmark bund, an indicator of investor confidence in the heavily indebted country's ability to weather the euro crisis, was at 502 points, surpassing the psychologically important 500-point threshold, with a yield of 6.39%. The equivalent spread between Italian and German bonds was 427, up from 420, with a yield of 5.67%. Investor confidence was soured Thursday by product and manufacturing information (PMI) that showed the eurozone's biggest economy suffered an unexpected contraction in August, down to 48.3 points from 50.3 on the Markit index. The country also registered its seventh-consecutive private-sector contraction, prompting investors to fear that the mighty German economy is being pulled into the eurozone crisis.

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