The rout in eurozone government bonds is hitting Europe’s equity markets, and the pound is down as Britain heads to the polls.Latest: Varoufakis says deal could come soonFTSE 100 suffers triple-digit fallGerman bunds bashedSterling volatility jumpsReferendum talk in Greece 1.08pm BST Dramatic swings are taking place in the bond market.After crashing this morning, German bunds are now rebounding -- pushing the yield on 10-year bunds back down to around 0.63%.Today's intraday chart for 10-yr Bund yield. (Hint: the 10-yr Bund yield shouldn't do this kind of thing intraday.) pic.twitter.com/0h2FGow8BD 1.07pm BST Greece’s finance minister has also slapped down the suggestion that Greece has been rescued by countries who are even poorer.The money didn’t go to us, he says, but to eurozone banks who held Greek debt.asked about smaller, poorer EU countries bailing out Greece, @yanisvaroufakis sez almost all money actually went to banks.At #Brussels lunch, @yanisvaroufakis says 91% of bailout funding went to banks. #Greece 12.51pm BST Yanis Varoufakis is also denying that he’s been sidelined from the bailout talks. We’re all pulling together in perfect harmony, the Greek finance minister tells reporters:It's a leftie collectivist thing about whole government working together not sidelining, @yanisvaroufakis on his role"We work in perfect harmony," says @yanisvaroufakis of shakeup of #Greece bailout negotiating team 12.47pm BST More from Brussels..."It is a myth" that #Greece has not tabled serious reforms in bailout talks, says @yanisvaroufakisIs wine being served at this lunch event? if so, please stop serving it https://t.co/GOZXmpsY62 12.45pm BST Greece’s finance minister, Yanis Varoufakis, is giving a speech in Brussels now. It sounds like his now-traditional lecture on the failings of the past, along with an outline of a better future (if only creditors would agree...)..@yanisvaroufakis: revamp of VAT in a way that doesn't jeopardise lifestyles of ppl on islands..@yanisvaroufakis: what does reform package look like? Privatisations, not fire sales (state retains equity stake in impt assets)...At lunch speech in #Brussels, @yanisvaroufakis offers views on how to reach bailout deal. Sounds very similar to 3 months ago. 11.58am BST Greece and its creditors will continue to negotiate today, tomorrow, and over the weekend in the hope of making progress before Monday’s eurogroup meeting.#BrusselsGroup talks for #Greece are going on and will continue during the weekend says EC spokesperson @MargSchinas 11.56am BST The Athen stock market is bucking the trend today, and has risen by 2.5%.For the first time in a very long time the Greek media has been hit by that rarest of bugs: optimism. Encouraged by the “progress in talks” – voiced by the Greek prime minister Alexis Tsipras and EU commission president Jean-Claude Juncker last night - television pundits & newspaper headlines are suddenly talking of “a ray of hope” that might – just might - lead to a breakthrough after Monday’s Eurogroup meeting (of euro finance ministers). 11.37am BST Here’s our full story on the selloff that has hit the markets as Britain holds its tightest election in decades. Related: UK shares fall and pound volatile as voters go to the polls London shares suffered a sharp sell-off on Thursday morning as voting got under way in the closest general election for decades.Fears that Britain is set for a second successive hung parliament added to a global markets sell-off after Federal Reserve chair Janet Yellen warned share valuations could be dangerously high. 11.33am BST Worried that the selloff has hit your pension or ISA? Here’s the biggest fallers on the FTSE 100 today: 11.25am BST Ninety five of the 100 companies who make up the FTSE 100 has fallen this morning: 10.58am BST Today’s bond selloff is being fuelled by the fact the market has become quite illiquid. Investors have been piling into government bonds for many months, driving prices to record highs.Which is fine, until everyone decides the party is over and tries to leave.... This bond market liquidity = rooftop bar analogy I did for @FTLex last yr is holding up OK... http://t.co/Omk1twJKRM pic.twitter.com/UTRRfF1kXI 10.50am BST French government debt is also sliding, sending the yield (interest rate) on its 10-year bonds up over 1%.Bund crash draws all attention, but French bonds tumble as well. 10yr French yield jumps 1% for 1st time sine Dec. pic.twitter.com/cHHY6qBYkT 10.48am BST The selloff in German government debt is turning into a full-blown rout today, sending fear rippling through the financial markets. As prices fall, the yield on 10-year Bunds has jumped to 0.75%, from 0.6% last night. That’s the highest level since mid-December 2014.Bund sell-off becomes disorderly. 10yr yield now 18bps higher at 0.76%. pic.twitter.com/dit9eQRijvSo that rolling 2-wk Bund yield move that was +48 bps this morning, now +59 bps: way, way off the charts pic.twitter.com/ukp0qgk2ll 10.34am BST Here’s another chart showing that the cost of buying protection against sterling volatility is its highest in several years:#Sterling volatility overtakes Scottish Independence, Eurozone crisis #GE2015 http://t.co/Df2HOGXYM9 #forex pic.twitter.com/bMzaHTajZ3 10.17am BST The UK election is hitting demand for the pound and British government debt [gilts], says David Madden, market analyst at IG.Sterling will be subdued as voters go to the polls today, and with no clear outcome in the pipeline for today’s election dealers will be avoiding the pound like the plague. Gilts have a gloomy outlook for today’s session too.Greece has repaid €200 million to the IMF, but the deal for Monday still hangs in the balance. The ECB has increased the emerging financing facility for Greek banks, and the market is viewing this as a sign of weakness. Even though the Greek banking system has no shortage of funds, the Athens administration is in a very different situation. Even if Greece somehow manages to broker a deal by Monday, the indebted nation will have to make considerably larger repayments in the coming months and if the Greek government is having difficulty meeting Monday’s deadline what are the chances it will survive the summer deadlines? 10.02am BST City traders are also bracing for sharp swings in the value of sterling when the election results come in.The overnight cost of protecting against big swings in sterling’s exchange rate has jumped to its highest level since the 2008 financial crisis.“The problem is that this the closest election we have seen for a very long time, and in many ways the process doesn’t really start until we know the result and whether we have a ‘working’ government.” 9.47am BST The pound is coming under some pressure this morning amid general election uncertainty.Sterling has dropped by almost half a percent, to $1.518 against the US dollar and €1.3436 against the euro.GBPUSD giving up its gains from a strong services PMI figure yesterday. 2nd worst performer in the G10 today #GE2015 pic.twitter.com/Hrecfxk47b 9.30am BST Over in Greece, Syriza MP Costas Lapavitsas has warned that Greece could struggle to meet its financing demands without a deal soon.Lapavitsas, an economics professor, also blamed the country’s creditors for taking a hard stance.#lapavitsas, economist on syriza's left platform, commenting on skai right now, cites media pressure on #greece to sign deal. #lapavistas expresses reservations as he only sees a hostile mood towards #greece; creditors have hard stance, don't see how it will soften#lapavitsas says what is important is for an agreement to be compatible with platform on which syriza was elected. #greece#lapavitsas: we feel the responsibility heavily and will not accept things that are incompatible with our [#syriza] program. #greece#lapavitsas: "the economy is in a difficult position but don't think this will be resolved monday." #greece#lapavitsas sees work continuing at technical level through may and if fiscal problems seen, things will become complicated.asked about "honorable compromise", #lapavitsas says govt has shown a willingness, it's the other side that is the problem.#lapavitsas: if we're asked to sign things that are not compatible with our program, then there will be an issue of rupture.#lapavitsas: 'rupture' can even mean making a choice of what you will pay and what you won't this month.#lapavitsas: i believe we can weather this month too, but i just wanted to be clear on what 'rupture' means. 9.21am BST World markets have been dipping since peaking in late-April:Market rout has wiped out almost $1.7trn from the value in global stock markets. pic.twitter.com/0GatVVakwX 9.11am BST The sharp sell-off in government bonds in recent days shows that investors have grown weary of paying such elevated prices for sovereign debt. As the Financial Times explains:Steven Major, global head of fixed income research at HSBC, said the bond sell-off was driven by investor fatigue, as well as burgeoning signs of inflation and higher issuance of eurozone bonds. “It’s a form of indigestion,” he said.“There just isn’t the same appetite for bonds at ultra-low yields.” 9.06am BST The FTSE 100 index is also being dragged down by supermarket chain Morrisons; its shares are down 6.6% after reporting that sales have continued to decline.Like-for-like sales, excluding fuel, slipped by another 2.9% in the last three months as the firm continues to struggle. 8.44am BST The general election is also weighing on the London stock market, as Brits head to the polls for the tightest race in decades.The softer open comes in the run up to the closest run UK election since World War 2. UK election complexion and majority rejection sees FTSE 100 continue its correction directionAs the UK goes to the polls, investors have plenty of other issues to focus on away from domestic politics.Yesterday saw core sovereign bond yields continue to head higher; Brent oil prices hit a new peak for the year, as US crude stocks fell for the first time since January; and Fed Chair Yellen suggested that the current level of equity market valuations is “quite high” and poses “potential dangers”. 8.37am BST Eurozone bonds are still fairly close to their record high levels (reminder, prices fall when yields rise), but the scale of the sell-off is quite startling.Anyone who piled into German bunds this year is now facing a loss.The German 10-year government bond #yield has risen an average of 7 basis points per day for the last seven days. pic.twitter.com/5P8SNF8aWk 8.30am BST European stock markets have hit their lowest levels in two months, as the bond rout hits confidence.The German, French, UK, Spanish and Italian markets are all in the red, following losses in Asia over night.“There are potential dangers there,” she said, in remarks reminiscent of her predecessor Alan Greenspan’s infamous 1996 warning that some investors were showing, “irrational exuberance”. Related: US Federal Reserve chair highlights concerns over ultra-low interest rates 8.18am BST The slide in eurozone government bonds is continuing this morning, driving up borrowing costs to the highest levels of the year.The yields, or interest rates, on German, French, Italian and Spanish sovereign debt has all risen again, as traders continue to push prices down from recent record highs.Bund sell-off continues. 10yr German govt bond yields jump to 0.66%, hit fresh high for 2015. pic.twitter.com/5KEoszrCXWITALIAN 10-YEAR BOND YIELDS RISE OVER 2 PERCENT FOR FIRST TIME SINCE DEC 2014 #italy #finance #newsThe euro and 10-year German bond yield. Closely correlated: pic.twitter.com/5TInSU5kKHBond market weakness has been a key theme across the US and European markets. This has now clearly started having an impact on equities with confidence being sapped out of the market. 8.16am BST Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.Coming up today.... the Greek bailout deadlock continues to dominate the eurozone, with speculation swirling that a referendum may be called.The meeting will take place amid increasing calls from SYRIZA MPs and members for any deal to be put to a referendum.Prime Minister Alexis Tsipras may take part in Friday’s gathering, giving him a chance to get a taste of the mood within his party. It is not yet clear if a central committee meeting will be held over the weekend or if Tsipras will wait for further progress to be made in the talks before the party body convenes."There is a strong feeling within #Syriza that there should be a referendum on the final agreement with creditors" http://t.co/arsQ4ae5Iareading the headlines on #greece is like plucking a damn daisy: we're near a deal, we're nowhere near a deal, we're near a deal...Final @guardian #GE2015 forecast: Cameron is unlikely to have the numbers to continue as PM http://t.co/0uE4TDYmvd pic.twitter.com/KMfV456LoN Related: Election polling day live: Tories and Labour neck and neck as UK polling stations open Continue reading...
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