Peripheral bond yields up 12 to 20 bps
Euro rises but then falls in volatile trading
Stocks fall after hawkish tone in statement

LONDON, June 9 Reuters Bond yields across southern Europe soared on Thursday after the European Central Bank signalled a string of interest rate hikes starting in July to tame stubbornly high inflation.

European stocks fell on confirmation that the ECB would end its Asset Purchase Programme, its main stimulus tool since the euro debt crisis.

Policymakers flagged a 25 bps move in July and said they may move again in September, possibly by a bigger margin. Money markets ramped up bets for ECB rate hikes and are now pricing in 145 basis points worth of increases in 2022 .

Italy39;s 10year bond yield rose as much as 20 bps on the day and hit its highest level since 2018 at 3.715 , while Spanish, Portuguese and Greek yields rose 1016 bps each.

German 10year bond yields rose to the highest since July 2014 at 1.47 from around 1.37 earlier and twoyear yields were up 7 bps at 0.78.

In volatile trading, the euro initially rose but later fell as traders struggled to decide whether the ECB was sounding more hawkish than expected.

Analysts for the most part saw the statement as the ECB39;s attempt to catch up with other major central banks, which are already well along the ratehike path.

It is a hawkish pivot, what they are delivering now is not just one or two rate hikes but a clear message that they will have to get rates a lot higher over the…