Italian and Spanish bonds fell as investors bet that 10-year yields close to the lowest since at least 2010 may be untenable as a report showed the euro-area economy shrank more in the first quarter than analysts forecast.
Pacific Investment Management Co. is shunning long-dated European government securities because of the region’s growth outlook, according to Andrew Balls, head of European portfolio management at the firm.
Pacific Investment Management Co., home to the world’s biggest fixed-income fund, is shying away from risky assets as it sees a growing disconnect between the performances of financial markets and the global economy.
Italy’s bonds fell for a second day as Pacific Investment Management Co. said it lowered its holdings, fueling bets a rally that took 10-year yields below 4 percent for the first time since November 2010 was excessive.
Policy makers are “complacent” and risking investment in Spain by failing to take enough action to stabilize the nation, according to money managers at Pacific Investment Management Co. and BlueBay Asset Management Ltd.