* Euro zone periphery govt bond yields http://tmsnrt.rs/2ii2Bqr
MILAN, Dec 2 (Reuters) - Euro zone government bond yields
held steady on Wednesday, boosted by hopes of a quick approval
of a coronavirus stimulus plan in the United States, while
expectations of more easing by the ECB was capping possible
Top Senate Republican Mitch McConnell said on Tuesday the
U.S. Congress should include a fresh wave of stimulus in a
must-pass $1.4 trillion spending bill aimed at heading off a
U.S. Treasury yields surged on Tuesday, propelled by the new
push in Congress to send federal aid to businesses and state and
local governments hit by the pandemic.
ECB Board member Philip Lane is due to speak as part of the
Thomson Reuters Global Investment Summit at 1400 GMT, ahead of
the Dec. 10 ECB policy meeting, which is expected to increase
and extend its Pandemic Emergency Purchase Programme (PEPP).
Yesterdays price action is a reminder of how a U.S.
Treasuries sell-off could tighten financing conditions for
Europe, Citi told customers.
PEPP is likely to respond to cap euro yields, but it is
worth remembering that ECB QE normally breaks over year-end,
perhaps opening up a small window of vulnerability.
German 10-year government bond yields were at
-0.525%, not far from a 3-week high.
The spread between U.S. Treasuries and Bund yields
is down 0.5 basis points to 144.8.
The broad sell-off across Treasuries and Bunds amid
struggling spreads underscores the tricky interaction of
positioning and swings in sentiment heading into year-end,
Commerzbank told customers.
Italian 10-year government bond yield was down 1
basis point at 0.631%.
(Reporting by Stefano Rebaudo;
Editing by Alison Williams)