The FINANCIAL — Lower-rated euro-zone government bonds fell while Bund futures hit record highs Monday after election results in Greece fanned fears that the country could leave the euro zone, spurring investors to shun assets perceived to be risky and seek safety in German debt.
French bond yields also climbed after Socialist candidate Francois Hollande won the Presidential election, with some investors worried that Hollande might announce populist measures that could further weaken French finances.
Shorter-dated Spanish and Italian government bonds were particularly weak, with two-year yields rising by 18 basis points and 10 basis points to 3.31% and 3%, respectively on Tradeweb. Volumes were extremely light though due to a public holiday in London.
According to Borsa Italiana – London Stock Exchange Group, the 10-year Italian bond yield was seven basis points higher at 5.71%, while the corresponding Spanish bond yield was up eight basis points at 5.81%. The 10-year French bond yield was up three basis points at 2.87%.
German bonds, seen as a harbor of safety in times in trouble, rose. The near-month Bund futures contract hit a record high of 142.40, before easing slightly to 142.29, still 23 ticks high than Friday.