New year jitters for bond markets as ECB cuts back stimulus

[Gerald]

LONDON (Reuters) - Borrowing costs across the euro area shot higher on Tuesday as a cut in monthly ECB asset purchases became a reality, with hawkish comments from a top official and strong data hurting sentiment towards bonds on the first trading day of the year.

Peripheral bonds markets, the biggest beneficiaries of European Central Bank stimulus, bore the brunt of the selling. Yields in Italy, Spain and Portugal rose 6-7 basis points each, widening the gap over German peers.

But even “core” or top-rated bond markets were left unscathed from the selling pressure, with Germany’s 10-year bond yield hitting two-month high.

https://www.reuters.com/article/us-e...KBN1ER0UL?il=0

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