Spanish, Italian Bonds Slump as ECB Refrains From Extra Measures

Spanish and Italian bonds tumbled as the European Central Bank refrained from announcing any additional steps to cap debt yields in the two nations after cutting its benchmark interest rate to a record low.

Spain’s 10-year yields climbed the most in the euro era after the nation’s borrowing costs increased at an auction amid concern the debt crisis is worsening. German two-year notes rose as the ECB also cut its deposit rate to zero to revive the region’s economy. Speaking in Frankfurt after the decision, ECB President Mario Draghi said the council didn’t discuss other non-standard tools. Spanish and Italian bonds jumped last week after euro-area leaders expanded steps to combat the turmoil.