Germany’s 10-year government bonds advanced for a third day, pushing the yield to the lowest in 13 months, as escalating violence from the Middle East to Ukraine fueled demand for the euro area’s safest securities.
U.K. government bonds declined for a third day as a report showed house prices climbed to a record in May amid an economic recovery that sent 10-year yields to the highest since 2011 earlier this year.
The bonds of the euro area’s higher- yielding nations surged as European Central Bank President Mario Draghi lowered interest rates and unveiled an unprecedented round of stimulus measures to boost the region’s economy.
German 10-year bunds completed a weekly advance that sent yields down the most since September amid the prospect of European Central Bank stimulus and as political turmoil in Greece boosted haven assets.
Spanish five-year notes fell, reversing an earlier gain, as demand waned at an auction of the securities before the start of elections for the European Parliament that may boost parties opposed to austerity.
Britain’s strengthening economic outlook is leading traders of currencies, money markets and bonds to the same conclusion -- the Bank of England is going to need to start considering raising interest rates soon.
Treasuries were set for the steepest weekly decline this year amid speculation a U.S. jobs report today will strengthen the case for the Federal Reserve to push ahead with tapering its monetary stimulus program.