Sweden’s krona declined to the weakest level in almost two years against the euro amid speculation the nation’s central bank will cut interest rates at least once this year, damping demand for the currency.
European government bonds advanced after Federal Reserve minutes damped speculation U.S. policy makers are moving toward raising interest rates, and as Greece returned to debt markets for the first time since 2010.
Europe’s worsening growth prospects are losing significance for bond investors as bets the European Central Bank will begin asset-purchase stimulus measures support demand for the region’s higher-yielding bonds.
Greece is planning to announce a sale of five-year notes via banks tomorrow, according to two people familiar with the matter, as the country that sparked Europe’s sovereign debt crisis returns from a bond-market exile.
Italian government bonds fell, pushing 10-year yields up from a record low, as investors monitored speeches by European Central Bank policy makers for signs of whether they will introduce new stimulus.
Italian bonds led gains in euro-area government debt markets as European Central Bank President Mario Draghi said policy makers debated measures that tend to lower borrowing costs as they seek to stem the threat of deflation.