Bonds Slump From Germany to Portugal on Fears Rally Overdone
- Core and periphery securities fall from post-ECB meeting highs
- Bund yields rebounding after they fell ‘too low,’ UBS says
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European government bonds slumped, snapping a rally started after the European Central Bank’s meeting two weeks ago, as some investors judged recent gains excessive.
German and Italian securities fell along with their core and peripheral peers in Thursday’s selloff, with yields rising from lows seen after the ECB’s Oct. 26 decision. The yield on 10-year bunds rebounded from an eight-week low touched on Wednesday amid concern notes had fallen too far, according to John Wraith, a strategist in London at UBS Group AG. He sees the rate on bunds rising to 0.9 percent by end-2018.