The National Treasury Management Agency (NTMA) will be hoping that the success of Spain in raising new borrowings will set the tone for its next regular auction of Irish debt on Tuesday.
Spain was one of the biggest winners on the sovereign debt markets in Europe last week as its success in raising new debt money helped cut the cost of its annual interest rates on the markets. Its benchmark market rate – the annual interest rate on money it pays to borrow for 10 years – slid by almost a quarter point to 4.45% in the last five days.
Spain could be gaining the confidence of the markets and may draw closer to the 4% rate Italy needs to pay to borrow money for 10 years. But the country's success leaves Ireland and Portugal, after Greece, even more emphatically as the outliers in the eurozone.
The market rate for Ireland to borrow money for 10 years widened by over a quarter of a point (27 basis points) to 5.52% last week, while Portuguese rates rose 12 basis points to 5.46%.
However, analysts believe that, because Ireland is paying elevated interest rates, the NTMA will successfully raise the new borrowings on Tuesday. Depending on demand, the debt agency said on Friday it will seek to borrow up to €1.5bn by selling two existing bonds dated 2016 and 2020 on 20 July.
Bigger tests remain. Irish banks face the results of the ECB's stress tests on Friday. The Dublin banks then face trying to refinance over €50bn of senior debt, amounting to about a third of gross national product, by the end of September.