Eurozone bonds up on ECB outlook

After last week’s sell-off, eurozone government bonds rallied yesterday, pushing benchmark German 10-year yields down from the highest level since September.

Spanish securities led the advance after oil extended its decline below $40 a barrel, damping the inflation outlook and supporting fixed-income assets.

While the ECB’s decision last week to cut its deposit rate by 10 basis points and extend its €60bn a month asset-purchase programme by six months initially underwhelmed markets, ECB president Mario Draghi reassured investors the following day that further stimulus can be implemented if needed.