June 6, 2014 / 7:15 AM / 3 years ago

Peripheral euro zone bond yields at new lows after ECB stimulus

LONDON, June 6 (Reuters) - Lower-rated euro zone government bond yields fell to fresh record lows on Friday, as markets were buoyed by another wave of European Central Bank stimulus to fight the threat of deflation and prop up the bloc’s fragile economic recovery.

Italian, Spanish and Irish bonds led the way in a rally that stretched across all euro zone government debt, with traders citing the ECB’s measures on Thursday aimed at promoting bank lending in some of the continent’s most vulnerable economies.

Italian 10-year bond yields opened 8 basis points lower at 2.87 percent, Spanish equivalents opened 7 bps lower at 2.76 percent and Irish yields fell 7 bps to 2.51 percent.

The yield on 10-year German bonds, the benchmark for euro zone borrowing, opened 3 bps lower at 1.33 percent .

Reporting by John Geddie, editing by Jamie McGeever

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