European government bonds rallied, pushing Germany’s 30-year yields to the lowest since August, as slowing euro-area inflation boosted speculation the European Central Bank will take more measures to stimulate the economy.
Stocks fell, pushing the Standard & Poor’s 500 Index to a third weekly loss, and Treasuries rose amid a slump in emerging-market currencies and weaker corporate earnings. Copper dropped for an eighth day, the longest streak since December 1998.
Ireland’s bonds advanced for a fourth day after Moody’s Investors Service raised the nation’s credit rating back to investment grade, boosting confidence in the securities of the euro area’s most indebted nations.
Investors were so concerned about protecting their money from the European debt crisis last month they paid to hold Dutch government notes. An election this week is now raising questions about that status as a shelter.
Spanish and Italian government bonds rallied after a report showed the euro-area economy emerged from a record-long recession in the second quarter, spurring demand for the region’s higher-yielding assets.
Government bond sales in the euro region will increase by 1 billion euros ($1.27 billion) to a gross 990 billion euros in 2011 as increased redemptions outweigh improved government finances, ING Groep NV said.