LONDON Dec 30 Italian and Portuguese government
bond yields were on track on Friday to end 2016 with their first
yearly rise since the 2011 euro zone debt crisis.
The rise in borrowing costs in the two peripheral countries,
regarded as among the weakest links in the single currency bloc
comes against a backdrop of concern about weakness in the
banking sector and economy as well as political instability.
Italy's 10-year government bond yield has
risen about 21 basis points this year to around 1.81 percent,
while Portuguese equivalents have soared about 123 bps to around
3.75 percent. According to Tradeweb data, that
marks the first annual rise in borrowing costs since 2011.
However, efforts to tackle Italy's banking crisis and the
swift formation of a new government following the resignation of
former premier Matteo Renzi earlier this month have helped
Italian bonds recover some ground.
Ten-year Italian yields were set to end December with a fall
of around 19 bps, the biggest monthly fall since March. German
Bund yields were also poised for their biggest monthly fall
(Reporting by Dhara Ranasinghe, editing by Nigel Stephenson)