Italian, Spanish bond yields rise as Trichet talks

Yields on long-term Spanish and Italian government bonds increased Thursday as European Central Bank President Jean-Claude Trichet said the bank would hold more liquidity operations to give euro-area banks more cash.

However, short-term securities improved a bit, pushing yields lower. Bond yields move inversely to prices and rising yields indicate investors want more protection for the risk of holding the security.

Yields on 10-year Italian bonds rose to 6.12% during Trichet's press conference, from 6.06% before it began. Yields on Spanish 10-year bonds rose to 6.24% from 6.18% earlier. Italian 2-year bonds yielded 4.46% at last check, from 4.53% prior to the conference. Spanish 2-year yields slipped to 4.35% from 4.39%. The euro EURUSD -1.31% fell as low as $1.4151 as Trichet made the announcement then recovered to $1.4224, little changed from before his press conference and down from $1.4318 Wednesday. (Market Watch)