Peripheral European bond yields narrow as Merkel forms 'grand coalition' with SPD

Months of talks between the parties

Tom Eckett
German Chancellor Angela Merkel and SPD leader Martin Schulz

German Chancellor Angela Merkel and SPD leader Martin Schulz

Southern European bond yields have narrowed after Chancellor Angela Merkel finally reached a coalition agreement "in principle" with Martin Schulz's pro-European Social Democrat (SPD) Party.

The announcement comes after months of talks between the two parties, and signals an end to the longest period without a government since World War II, after Merkel failed to secure an overall majority...

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