Italian yields fall after Renzi's party wins EU vote

LONDON Mon May 26, 2014 3:02am EDT

LONDON May 26 (Reuters) - Italian bond yields fell on Monday as Prime Minister Matteo Renzi's centre-left Democratic Party looked set to win European parliamentary elections, easing concerns of a victory by the anti-establishment 5-Star Movement.

Signs of the outcome in Italy were in sharp contrast to much of Europe where Eurosceptic nationalists scored stunning victories in elections in France and Britain on Sunday.

Critics of the European Union more than doubled their seats in a continent-wide protest vote against austerity and unemployment.

Renzi's party had a strong lead over the anti-establishment 5-Star Movement of former comic Beppe Grillo, early projections showed.

Italian 10-year bond yields were 9 basis points down at 3.06 percent with Spanish equivalents 6 bps lower at 2.93 percent.

Greek 10-year yields were 2 bps lower at 6.51 percent after the anti-austerity Syriza movement of Alexis Tsipras won the vote but failed to deliver a knockout blow to the government of Prime Minister Antonis Samaras.

French yields were flat at 1.82 percent with the market shrugging off for now the National Front's triumph at the weekend polls. (Reporting by Emelia Sithole-Matarise)

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