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 two-year government notes declined, erasing earlier gains, after a report showed U.S. companies added almost three times as many jobs as forecast in December, damping demand for the safest assets.
Treasury 10-year notes headed for the longest streak of weekly losses in 19 months before a report economists said will show consumer spending gained last month, stoking speculation the central bank will slow asset purchases.