Euro zone bonds, stocks rally on report of ECB stimulus package
LONDON, Sept 3 (Reuters) - The euro zone zone's stock and bonds rallied on Tuesday following a Reuters report that ECB policymakers are leaning towards a stimulus package that includes an interest rate cut and a beefed-up pledge to keep rates low for longer.
Many also favour restarting asset buys, a significantly more powerful weapon, but opposition from some northern European countries is complicating this issue, sources familiar with the European Central Bank discussions said. to the report, the ECB could also introduce compensation for banks over the side-effects of negative rates.
Southern (NYSE: SO ) euro zone bond prices rose after the report, pushing the yield on Italy's 10-year bond to a new record low of 0.87% IT10YT=RR .
The Euro STOXX .STOXXE index jumped briefly, cutting some losses, mainly due to a sharp spike in shares of Italian banks. The Italian banking index .FTIT8300 turned positive, rising 0.6% as of 1341 GMT.
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