Market pressure eases on Spain amid bailout hopes

Rising speculation that Spain will soon ask for outside help to keep a lid on its borrowing costs has helped ease the pressure on the country in financial markets.

The interest rate on Spain's benchmark 10-year bond has fallen 0.23 percentage points to 5.53 per cent in early trading today. It has hovered close to 6 per cent in recent weeks amid uncertainty over whether the country will apply for aid so that the European Central Bank can begin buying its bonds in the markets in an attempt to keep its borrowing costs down.

There was also some relief in the markets that Moody's did not cut its credit rating on the country as had been widely-feared. Instead, Moody's yesterday maintained its Baa3 rating on Spain, the lowest investment grade.