Focus turns to periphery pain after UK vote hits home

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By Craig McGlashan
24 Jun 2016

The UK may have knocked the eurozone periphery off a cliff as it stumbled on its way out of the European Union on Friday morning. Government bond spreads on Friday echoed those during the eurozone sovereign debt crisis. The gap between Germany and the periphery has opened up like the chasm that has developed between UK voters and the political establishment.

The 10 year Bund yield plunged to about minus 15bp at Friday’s open, while the equivalent Italian rate rose 30bp to top 1.7%. Those yields have fallen back from those extremes, to around minus 8bp and 1.5%, but there are still strong concerns about how periphery countries might ...

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