Irish bonds continued to suffer today, as concern that euro-area peripheral nations including Ireland will struggle to reduce their budget deficits spurred demand for the safest assets.
The bonds weakened for the 11th consecutive day, their longest run of declines since January 2009. The yield on the benchmark bonds closed at 7.938 per cent (or 738 basis points), a euro era record high.
Meanwhile, German 10-year bunds climbed for the second day. The difference in yield, or spread, between 10-year Irish bonds and similar-maturity bunds widened to a record 552 basis points, or 5.52 percentage points, even as European economic and monetary affairs commissioner Olli Rehn said Ireland hasn't asked for aid.
"Concerns over sovereign debt in the euro zone periphery remained in sharp focus yesterday," Ulster Bank economist Richard Ramsey said in a note.
"The Irish bond spread on 10-year sovereign debt reached 550bps over the last 24 hours which represents another record margin."
Greece sold €390 million of 26-week Treasury bills today. Investors bid for 5.15 times the securities offered.
"It is difficult to see what can turn around the pressure on periphery paper," analysts at WestLB AG, including John Davies in London, wrote in an e-mailed report today. "Even a successful Greek Treasury bill sale is unlikely to stabilise spreads. Bunds should therefore remain supported by the related safe-haven bid."
The yield on the 10-year bund, Europe's benchmark government security, was at 2.38 per cent at 12.47pm in London, near the lowest since October 15th. The two-year yield was little changed at 0.92 per cent.
Portuguese bonds weakened as market participants prepared for tomorrow's auction of as much as €1.25 billion of debt maturing in 2016 and 2020. The 10-year yield climbed 12 basis points to 6.94 per cent.
Greek 10-year bonds gained for a second day. Ten-year bond yields slid 16 basis points to 11.37 per cent.
German bonds have returned 8.7 per cent this year, compared with an 8.9 per cent gain for US Treasuries, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies.
Austrian bonds returned 9.6 per cent, while Greek debt lost 18 per cent, the indexes show. Irish securities declined 11 per cent and Portuguese bonds fell 9.2 per cent, according to the indexes.
Additional reporting: Bloomberg