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This pushes up the yields on the bonds, which in turn drives up mortgage rates for people taking out new conforming home loans.
Financial markets have driven up the yields on Italian and Spanish bonds, despite frantic buying by the European Central Bank (ECB), the only institution with any firepower until the EFSF is rebooted.
Jitters about Greece in effect becoming bankrupt and being forced to leave the currency union pushed up the yields of government bonds from other countries on the eurozone's periphery last week.
Both were international French bistro and supermarket staples that fell victim to their own popularity in the 1970s and 1980s, when producers ramped up the yields until quality suffered and they fell out of favour.
By selling off existing Greek bonds, dealers pushed up the yields on those bonds because yields move inversely to price.
The expectation of this wave of bills has already driven up the yields on three-month and six-month Treasury bills compared with similar short-term offerings.
Similar(54)
In such circumstances, creditors could always shift up the yield curve.
British government bonds have fallen in value today, pushing up the yield (interest rate) on benchmark 10-year gilts.
The selloff has driven up the yield (interest rate) on benchmark Italian 10-year bonds to 3.15%, from 3.06% on Friday (yields rise when prices fall).
French bond yields have weakened a little, pushing up the yield on 10-year sovereign debt by eight basis points to 2.15%.
Investors drove down the value of Ireland's sovereign debt on Wednesday morning, driving up the yield – or interest rate – on the Irish 10-year bond above 14%.
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