Spanish retail investors demand 15 billion euros in Treasury bills

Retail investors in Spain have significantly increased their demand for Treasury bills, with total investments reaching 15,000 million euros over the last six months. This shift follows eighteen months of consecutive declines in household holdings.

The surge in demand is attributed to rising yields driven by geopolitical instability and inflation. Following the conflict in Iran and the blockade of the Strait of Hormuz on February 28, oil prices rose by more than 40%, pushing European inflation above 3%. This economic pressure led the European Central Bank (ECB) to raise interest rates in June, with markets anticipating further increases by year-end.

Recent data from the Bank of Spain indicates that household investment in short-term Treasury bills rose in May for the third consecutive month, reaching 20,331 million euros. In the latest auction, six-month Spanish Treasury bill yields reached 2.512%, and twelve-month yields hit 2.679%.

Félix López, a fixed-income manager at Abante, noted that geopolitics remains the primary driver of oil prices and inflationary pressures. He suggested that yields could rise further if the situation persists, though he cautioned investors to consider the impact of taxation on nominal returns.