Spanish, Italian Bonds Tumble as U.K. Vote Punishes Peripherals
- Spain-Germany 10-year spread reaches widest during QE era
- Investors seek haven assets on risk of disruption to EU
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Spanish and Italian bonds declined after Britain chose to quit the European Union, triggering a worldwide selloff in lower-rated debt and equities and a flight to haven investments such as German bunds.
The yield difference, or spread, between Spain’s 10-year bonds and similar-maturity German government bonds widened to the highest level since before the European Central Bank began its bond-buying program in March 2015. Germany’s bunds climbed, pushing 10-year yields to a record low, as investors sought the relative safety of Europe’s benchmark sovereign debt.