London: Bond yields in Italy and Portugal hit their lowest levels in around a month yesterday, leading a fall in eurozone borrowing costs as signs of slowing growth in business activity reaffirmed a view that any unwinding of ECB stimulus is likely to be slow.
In the past week, comments from the European Central Bank and strength in the euro - trading near two-year highs against the dollar - have eased investor worries about a tapering of the central bank’s bond-buying stimulus scheme.
Data yesterday showing Germany’s private sector grew at a slower pace in July, while French business activity slowed more than expected in July to a six-month low gave investors another incentive to move back into bond markets that have been rattled in the past month by concerns over tapering.
Portugal’s 10-year government bond yield fell 5 basis points to 2.89 percent, its lowest level in just over a month.
Italian 10-year bond yields were down 4 bps at 2.04 percent - their lowest in almost a month.
