UPDATE 1-Southern euro zone bond yields fall to new record lows

* Italian, Greek yields hit new record lows

* Portuguese 10-year yield on cusp of turning negative

* German bund yields pinned near recent levels

* Euro zone periphery govt bond yields tmsnrt.rs/2ii2Bqr (Adds details, latest prices, chart)

LONDON, Nov 9 (Reuters) – Italian and Greek bond yields hit new record lows on Monday as investors cheered rating agency reviews of their credit ratings and Joe Biden’s presumed victory in the U.S. presidential election boosted sentiment.

Yields on riskier peripheral sovereign debt fell across countries, a sign investors were willing to take on more risk and were relieved about an election outcome in the United States after last week’s uncertainty. Stock markets surged.

The Italian 10-year yield fell 4 basis points to a record low of 0.572%, with bonds supported by Moody’s sticking with its Baa3 credit rating late on Friday and affirming the outlook as “stable”. The 5-year bond yield dipped back into negative-yielding territory.

Greece’s 10-year yield dropped 8 basis points to 0.747% , also a record low, after Moody’s on Friday upgraded the country’s sovereign debt to Ba3 from B1, citing a stable outlook for the country.

Spanish yields dropped 2 to 3 basis points, as did Portuguese, with the latter heading towards a negative yield.

With little significant economic data on Monday, analysts expect a quiet session for core euro zone bonds, with German bunds remaining close to current levels.

“A light data agenda today is likely to leave Bunds driven by swings in risk appetite and the fallout from the U.S. elections,” UniCredit analysts said in a note.

“However, given we expect only moderate pressure on U.S. yields, it is hard to see 10Y Bunds to moving back above the -0.60% threshold in a stable way anytime soon. Ongoing ECB purchases will continue to provide support.”

U.S. Treasury yields have risen in recent sessions as investors anticipated increased fiscal spending under a Biden administration, while euro zone yields have been little changed – bond-buying by the European Central Bank has kept yields trading within tight ranges.

The benchmark German 10-year yield dropped 2 basis points to -0.641%.

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