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* Euro zone periphery govt bond yields http://tmsnrt.rs/2ii2Bqr
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By Olga Cotaga
LONDON, Nov 23 (Reuters) - Euro zone government bonds were
little changed despite positive news on a AstraZeneca
vaccine, as investors focused on the major economies under
strict lockdowns and the fact COVID-19 cases are not receding.
Britain’s AstraZeneca said on Monday its vaccine for the
novel coronavirus could be around 90% effective without any
serious side effects, making it the latest pharmaceutical
company to report on late stage results.
But more than 58.32 million people are reported to be
infected by the coronavirus globally and 1,385,595? have died,
according to a Reuters tally.
And many of Germany's 16 federal states favour extending a
partial shutdown meant to slow the spread of the COVID-19
pandemic.
"The covid pandemic, and associated social distancing
measures, remains front and centre on investors' minds," said
ING analysts in a note to clients. "This, combined with still
cautious central banks, would reduce euro zone rates upside."
Benchmark German 10-year Bund yields were last flat at
-0.577%, after falling to a two-week low of -0.592%.
Peripheral yields were lower, with Italian 10-year BTP yields
down 1.3 basis points at 0.585%, close to its recent
0.57% record low.
Portuguese 10-year government bond yields were flat, but at
0.026%, they were close to negative territory.
Euro zone business activity contracted this month as renewed
lockdowns forced much of the bloc's dominant service industry to
close temporarily. Investors were indifferent; yields were
little changed.
The spread between German and Italian government bond yields
-- essentially the premium Italy is paying for its
debt -- stood at 117 basis points, close to a two-and-a-half
year low.
ING analysts see the spread between euro zone and U.S.
government bond yields shrinking, too, given that "the current
wave is at an earlier stage in the U.S. and so we expect
pessimism to be the dominant tone in U.S. markets," they said.
The spread stood at -143 basis points, near
the half-year low touched earlier this month.
Elsewhere, Belgium raised 1.494 billion euros ($1.258
billion) in an OLO (linear bond) auction on Monday, the Belgian
debt agency said.
ING said a total of 14 billion euros were expected in
issuance this week from Belgium, the Netherlands and Italy.
Rabobank estimated a total of 11 billion euros.
Credit-rating agency Moody’s is expected to review Belgium's
rating on Friday, which currently stands at Aa3.
Belgium's 10-year government bond yields were last steady at
-0.394%.
(Reporting by Olga Cotaga, editng by Larry King)
