July 21, 2017 / 7:16 AM / a year ago

Southern European government bond yields drop as investors cheer ECB caution

LONDON, July 21 (Reuters) - Southern European government bond yields fell sharply on Friday following cautious comments from European Central Bank chief Mario Draghi the previous day.

The ECB left its ultra easy monetary policy unchanged on Thursday and did not even discuss clawing back stimulus, suggesting it may delay an inevitable decision on tapering bond buys until the latest possible moment.

Lower-rated Southern European government bonds are seen as the biggest beneficiaries of the ECB’s largesse.

Spanish, Italian and Portuguese 10-year government bond yields fell 3-4 basis points in early trade. (Reporting by Abhinav Ramnarayan, Editing by Sujata Rao)

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