April 30, 2020 / 1:56 PM / 2 months ago

Bank stocks add to losses, Bund yields fall after ECB conference

LONDON, April 30 (Reuters) - Euro zone bank stocks extended their losses and the German Bund yields fell further to 1-1/2-month lows during the European Central Bank’s press conference on Thursday.

Banking shares, which were already down, dropped as much as 6.5% after Lagarde said the committee did not discuss buying junk bonds as part of its asset purchase programme.

Germany’s benchmark 10-year bond yields meanwhile declined to -0.559%, its lowest level since mid-March following dovish comments by ECB chief Christine Lagarde.

She said the bank would make full use of flexibility embedded in its various policy tools.

Italy’s 2-year bond yields, which have been in focus given short-term risks from the coronavirus crisis, erased some gains and were last down 7 bps to 0.56% after having fallen as much as 15 bps at the start of the conference. 10-year yields were last up 6 bps to 1.83%.

The euro fell slightly against the dollar as Lagarde spoke, from around $1.088 at 1300 GMT to a session low of $1.083 at 1317 GMT. It was last at $1.084, down 0.3% on the day.

Reporting by the London Markets Team, writing by Yoruk Bahceli; editing by

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