Italy sold 22.3 billion euros ($30 billion) of government inflation-linked bonds aimed at retail investors, setting a record and allowing the Treasury to potentially cut the size of debt auctions for the rest of the year.
German government bonds fell for the first time in three days before euro-area manufacturing and confidence reports this week that economists said will add to signs of recovery, damping demand for safer assets.
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.
Italian short-dated bond futures may offer investors better protection against price swings in Irish and Portuguese debt than contracts tied to longer-maturity securities or German notes, according to UniCredit SpA.
Italian government bonds rose for a second day as the nation sold 6 billion euros ($7.93 billion) of five- and 10-year securities amid easing political tension in the euro-region’s third-biggest economy.