(Bloomberg) -- A plummet in European bond prices on the prospect of the European Central Bank withdrawing its stimulus has erased two-and-a-half years of gains.
The total return on investment-grade debt from the region’s governments has fallen more than 3% this year to the lowest since the middle of 2019, according to the Bloomberg Euro Government Index. That means any investors tracking the benchmark have lost their gains since then.
The latest leg lower reflects bonds losing value following the ECB’s shift to a more hawkish stance last week to deal with a surge in inflation. That followed the first loss in European government securities last year since 2006. Italian debt has been the worst performer.
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