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.
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.
Prime Minister Silvio Berlusconi ’s longest-term bonds yield almost as much as Spain’s even though Italy’s deficit is less than half, a sign Europe’s debt crisis has created relative bargains for fixed-income investors.
Greek bonds were the top performers in Europe last quarter, gaining for the first time since the sovereign debt crisis began, as investors bet that record high yields more than compensate for the possibility of a default.