Southern European Bond Yields Tank as ECB Pushes Boundaries with New Scheme

Italian, Greek bond yields in huge plunge lower

by Saikat Chatterjee

LONDON, March 26 (Reuters) – Southern European government bonds rallied on Thursday, with yields on Italian and Greek debt tumbling after the European Central Bank announced the terms of its 750 billion euro bond-buying scheme to limit the impact of the coronavirus crisis.

The ECB said it would not apply its self-imposed purchase limits for any individual countries and would buy debt with a maturity as short as 70 days, well down from one year under previous purchase plans.

This was seen mainly benefiting the bond markets of Italy, Portugal and Greece, after investors sold their bonds heavily in recent weeks as the virus ravaged the struggling euro zone economy and heightened concerns about the more indebted members of the bloc.

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