Spanish and Italian yields fall on Draghi comments

LONDON: Spanish and Italian government bond yields fell on Tuesday as investors welcomed comments made by European Central Bank President Mario Draghi in the previous session, hinting at the scope of a much-anticipated bond buying programme.

Late in Monday's session Draghi was quoted as telling European lawmakers that the ECB's purchases of sovereign bonds with maturity of up to three years would not breach the European Union's taboo of directly financing euro zone economies.

Spanish and Italian two-year bond yields  were both down 12 basis points at 3.39 percent and 2.59 percent respectively. The decline in yields further up the curve was smaller.