Spanish yields hit euro-era high after rating cut

LONDON: Ten-year Spanish government bond yields hit a new euro-era high on Thursday after Moody's cut Spain's credit rating to just one notch above "junk" and ahead of an Italian debt auction which could prove tricky as the euro zone debt crisis deepens.

Ten-year Spanish yields rose close to the 7 percent danger levels, rising 13 basis points to 6.91 percent, while two-year yields jumped 23 bps to 5.2 percent.

Italian bonds came under pressure before a widely-watched debt auction, with 10-year yields rising 6 bps to 6.3 percent. Two-year Italian yields rose 14 bps to 4.87 percent.