Germany’s bonds dropped for a second day as investors weighed what Federal Reserve Chairman Ben S. Bernanke will say about the central bank’s asset-purchase program when he holds a press conference tomorrow.
Irish bonds led a surge by securities from Europe’s high-deficit countries as political leaders prepared a pledge to defend the euro and bridge differences over the mandate of the European Financial Stability Facility.
Spanish and Italian bonds rose, leading gains among government debt issued by Europe’s high- deficit nations, as Greece named an interim government to prepare for elections aimed at ending a political impasse.
Portugal’s borrowing costs rose and demand fell at a sale of 1.03 billion euros ($1.5 billion) of three- and 12-month bills amid mounting concern that investors may need to share the burden of losses from future debt crises.
German two-year note yields were within five basis points of the highest in 18 months as a report showed euro-region producer prices rose faster than forecast, stoking expectations for a rise in borrowing costs.