U.S. stocks halted a three-day slide as declining German unemployment stoked gains in European shares and bonds. The dollar climbed after the U.S. trade deficit shrank to a four-year low while commodities snapped their longest drop since November, led by gasoline and heating oil.
European government bonds jumped, with yields from Ireland to Greece dropping to the lowest since at least 2010, as signs of the region’s economy is recovering helped spark a surge in demand for the securities.
Spain’s decision to sell 10-year bonds through banks in place of scheduled auctions this week represents an effort to capture lower yields after successful debt sales in the region last week, WestLB AG said.
Treasuries rose, pushing yields lower for a second day, as investors weighed prospects for Federal Reserve stimulus at a meeting next week and economic data from Europe and Japan damped growth optimism.
German 30-year bonds rose, with yields falling from near a four-month high, as International Monetary Fund Managing Director Christine Lagarde urged policy makers to be vigilant of threats to global economic stability.
Italy’s 10-year yield approached a five-month low as Prime Minister Enrico Letta said turmoil in former Premier Silvio Berlusconi’s PDL party will boost government stability and the nation sold five-year notes in an exchange auction.
The yield on Portuguese five-year debt reached a euro-era record amid speculation the nation may be nearing a request for financial aid. Bunds rose for a third day as stocks fell after an earthquake struck northern Japan.