Italy’s government bonds dropped for a second day as a report showed consumer confidence worsened this month, encouraging investors to reduce their holdings after gains that pushed yields to a four-month low.
Portuguese bonds fell, pushing 10- year yields to the highest level in almost six weeks, as a court’s opposition to ending labor contracts for some workers raised concern the nation will struggle to meet deficit targets.
U.S. stocks extended the worst monthly drop since May 2012 as investors weighed prospects for an American military response to a chemical weapons attack in Syria. Oil and European shares fell while Portugal’s bond yields surged amid concern the nation won’t meet its deficit target.
Families holding historically large amounts of U.S. Treasuries are creating a potential price bubble as concern about a double-dip recession spurs demand for assets perceived to be safe, according to Credit Agricole CIB .
Italian and Spanish government bonds advanced for a third week after reports showed factory output in the euro area expanded for the first time in two years and the number of people unemployed in Germany declined.