Irish yields lower than UK’s for the first time since 2008

Lower-rated euro zone bond yields fell to fresh record lows and the common currency slid further on Friday as investors positioned for more monetary stimulus from the European Central Bank.

An upgrade by Standard & Poor’s of its credit rating outlook for Portugal added to the positive sentiment and gave a further boost to Lisbon as the country prepares to exit its international bailout this month.

Investors are betting the ECB will cut interest rates next month, paving the way for potential further steps such as a bond-buying programme, after its president Mario Draghi said on Thursday the bank was ready to act in June if updated inflation forecasts merit it.Yields on Irish, Italian and Spanish 10-year bonds hit record lows of 2.65 per cent, 2.9 per cent and 2.87 per cent respectively while the euro fell another 0.2 per cent from Thursday's US close.

Irish yields are now lower than the UK’s for the first time since 2008.

Portugal’s 10-year bonds yielded as little as 3.44 per cent, the lowest level since early 2006, on Friday after S&P lifted the country’s credit outlook to stable from negative, far from peaks above 17 per cent hit at the height of the euro zone debt crisis.

Reuters