European shares and bonds slip on Fed uncertainty
LONDON — European shares and bonds fell across the board on Wednesday, as robust US economic data fanned speculation the Federal Reserve may soon begin tapering back its bond-buying programme. The FTSE Eurofirst 300 index of top European shares was down 1% by midmorning, giving back much of the previous day’s 1.3% gain. However, analysts said the growth momentum implied by Tuesday’s US figures for home prices and consumer confidence could limit the falls.
The prospects of stronger US growth allied to an early retreat from the Fed’s $85bn a month stimulus programme weighed heavily on fixed-income markets, and both German Bunds and peripheral eurozone debt tracked falls in US Treasuries. The key German Bund futures contract was down 35 ticks to 143.48, following on from a rise in the 10-year Treasury note yield to a high of 2.235% on Wednesday, its highest since April 2012.
Lower-rated 10-year Spanish government bond yields were up four basis points at 4.34% and Italian yields up 3.4 basis points to 4.08%.... Read the full, comprehensive news article and discuss at Business Day