October 4, 2016 / 4:16 PM / a year ago

Euro zone bond yields, euro jump on report of ECB plan for QE tapering

LONDON (Reuters) - Euro zone bond yields soared across the region and the euro rose late on Tuesday after media reports of an ECB plan for tapering its asset-purchase programme.

The European Central Bank will probably slowly wind down bond purchases before it ends quantitative easing and could do so in steps of 10 billion euros ($11.2 billion) a month, Bloomberg news cited euro zone central bank officials as saying.

That triggered a sell-off in euro zone bonds, which have been underpinned by the 1.7 trillion euro bond-buying scheme.

Italian and Spanish 10-year bond yields rose as much as 8 basis points each on the day IT10YT=TWEB ES10YT=TWEB to two-week highs, while benchmark 10-year German Bund yields rose 5 bps to minus 0.042 percent DE10YT=TWEB -- their highest level in about 1-1/2 weeks.

German 30-year bond yields also rose sharply and were up 6 bps on the day at 0.54 percent DE30YT=TWEB, while the euro rallied on the report.

The euro rose past 88 pence EURGBP=D4 for the first time since early 2-013 on the report.

Reporting by Dhara Ranasinghe, John Geddie and Anirban Nag, editing by Nigel Stephenson

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