Spanish yields rise to multi-month highs Spanish bond yields hit the highest levels since the European Central Bank first launched emergency three-year loans to save the eurozone's financial system from a credit crunch. Spanish benchmark 10-year bond yields jumped to 5.81 per cent, the highest since December 12. Spanish 10-year yields are up more than 7 per cent this week, the worst since the week ending on January 6. They are also at fresh highs since the ECB launched the first of its two three-year loan injections at the end of December. The ECB has pumped more than €1tn into the region's financial system in the two loan tenders each of three years. Italian yields, which have an inverse relationship with prices, also jumped, sparking fears that the effects of the central's bank's emergency action, which triggered a powerful rally in the eurozone debt markets, is fading. Italian 10-year yields rose to 5.49 per cent, meaning yields have jumped 6 per cent this week, the worst since the end of November. Although French bond auctions went relatively smoothly on Thursday, concerns still centre on the less successful Spanish auctions on Wednesday, where Madrid sold €2.6bn of debt, at the lower end of a targeted range. On Thursday, France sold €8.4bn of bonds maturing between five and 30 years. The yield on France's five-year bond rose a fraction to 1.96 per cent, with a bid-to-cover rate of 3.27 times. This was an increase from a yield of 1.91 per cent when last auctioned on March 1. For the 30-year-bond, the yield fell to 3.79 per cent from 3.97 per cent. Yields also rose slightly for 10 and 15-year to 2.98 per cent from 2.91 per cent, and 3.46 per cent and 3.30 per cent, respectively. Investors have pointed out that credit default swaps (CDS), insurance-like products for government bonds, have already jumped sharply, suggesting increasing worries for the eurozone. Some investors say CDS is more accurately reflecting eurozone risks. CDS prices have not been affected by the ECB's more than €1tr injection of loans into the eurozone financial system, which has boosted bond markets as banks have loaded up on peripheral debt to take advantage of the cheap central bank loans. Spanish CDS prices have jumped from 343bp on February 7 to 466 basis points, or a cost of $466,000 to protect every $10m of debt annually over five years. Italian CDS has jumped from 349bp on March 19 to 410bp. By contrast, German yields have remained steady with 10-year bonds trading at 1.78 per cent, more or less flat on the week.