European Yields and Shares Slip on Mersch Comments

Bund and Gilt yields are down on the day, amid a broader decline in global yields as risk aversion continues to weigh on stock markets. Bunds underperformed and are up from early lows and Eurozone spreads widened, with French, Italian and Spanish 10-year yields now up on the day after Executive Board member Mersch suggested that there is a trend reversal in wages and underlying inflation while warning against keeping policy too accommodative for too long. Risk aversion weighed on European equity markets and also underpinned the widening of Eurozone spreads as Bunds outperformed, despite strong orders data at the start of the session. A weaker pound, which was hit by fresh Brexit jitters, helped Gilts and FTSE 100 to outperform.

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