Spain’s government bonds fell for a fourth day, the longest losing streak in three months, after euro-area services and manufacturing shrank more than economists forecast and German business confidence declined.
U.S. stocks fell, erasing early gains, and commodities dropped for a third day as the Federal Reserve said growth in employment remains slow and strains in financial markets continue to pose risks to the economy. Oil slid to a three-month low after American supplies increased.
Gilts fell for a second day after data showed economic growth beat forecasts and Standard & Poor’s raised the U.K’s credit outlook, damping expectations that the Bank of England would buy more bonds to support the recovery.
German government bonds climbed, snapping a two-day drop, as France backed Germany in refusing to add to the European Union’s 440 billion-euro ($581 billion) rescue fund and rejecting joint euro-area debt securities.
U.K. government bonds fell as gains in stock markets and speculation the European Central Bank may take additional steps to contain the sovereign-debt crisis reduced the appeal of British assets as a haven.
German government bonds rose for a second day amid speculation European policy makers will be unable to follow through on their pledge to shore up the single- currency area’s economy when they meet this week.