Italian and Greek bond yields soar

Italian bond yields soared on Monday while safe-haven German debt yields hit new record lows and eurozone inflation expectations tumbled to unprecedented levels as a crash in oil prices amplified recession fears spurred by coronavirus.

Italy’s 10-year yield was last up 23 basis points at 1.31 percent. That pushed the gap between Italy and eurozone benchmark German 10-year yields above 200 bps for the first time since August 2019.

Southern European debt sold off more broadly on Monday, with 10-year Greek yields jumping nearly 30 bps to 1.74 percent. They were below 1 percent just weeks ago.

While Spanish 10-year yields rose far less, up 2 bps on the day, the gap between the country and Germany’s 10-year yields widened to 110 basis points, its widest since April. [Reuters]