Italy’s government bonds rose for a second day as a survey of purchasing managers showed euro-area manufacturing and services grew more in December than economists forecast, boosting demand for higher-yielding assets.
Germany’s bonds fell this week, pushing 10-year yields to a 17-month high, as European Central Bank President Mario Draghi failed to convince investors interest rates will remain low amid global economic growth.
Spain’s efforts to cut the euro region’s third-biggest deficit may not avert record borrowing costs, as investors speculating on a bailout for Ireland or Portugal trash the bonds of Europe’s peripheral countries.
Spain’s plan to offer cash-strapped regional administrations emergency loans leaves the Treasury with 12 billion euros ($15 billion) of additional funding needs that the government says won’t affect its borrowing plans.
Investors bought all 3 billion euros ($3.8 billion) of 15-year bonds offered by Spain, with demand strong enough to ease concern the nation would struggle to cover debt payments after Greece’s bailout.