Spanish government bonds rose, pushing 10-year yields to the lowest since 2009, as improving euro-area retail sales and German factory orders added to signs the region’s recovery is gathering momentum.
German 10-year bunds climbed for the fourth consecutive day as investors sought the safest assets after European governments signaled bondholders may need to take bigger losses on Greek debt in a second aid package.
Germany’s government bonds fell on speculation euro-area banks will sell fixed-income assets after the European Central Bank said lenders plan to accelerate repayments of emergency loans next week to the most since May.
Italian 10-year bond yields rose above those of Spain for the first time in 18 months amid speculation a vote on whether to expel Silvio Berlusconi from Italy’s Senate will destabilize the coalition government.
When the housing bubble burst in 2006, U.S. policy makers looked to Japan for clues about what to do -- and not do -- in response. Now their attention is shifting to Europe as America gets set to follow that region with a concerted attack on its budget deficit.