Patrick Jacq News
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Italian government bonds fell after reports showing industrial production declined in April and the economy shrank more than initially reported in the first quarter undermined demand for the nation’s assets.
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Germany’s 10-year bonds advanced for the first month since July after a report showed the jobless rate in the euro area climbed to a record in October, indicating the region is struggling to boost growth.
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Spain’s bonds rose, with 10-year securities extending an eighth monthly gain, as investors sought higher-yielding assets amid speculation central banks around the world will extend stimulus measures to boost growth.
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Spain’s government bonds fell for the first time in three days as ministers from the 17-member euro area gather in Brussels today to discuss aid to Cyprus and Greece as they struggle to contain the region’s debt crisis.
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Spain is taking steps to build a “firewall” to stem contagion from Portugal’s debt woes as it cuts the deficit and retools its economy, said Andrew Bosomworth , a money manager at Pacific Investment Management Co.
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Italian government bonds climbed after the European Central Bank was said to buy the securities and German Chancellor Angela Merkel called for political action to stem the debt crisis.
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Italian and Spanish two-year notes jumped as the European Central Bank lent financial institutions more three-year cash than economists predicted, fueling bets the extraordinary loans will be used to buy the nations’ debt.
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Investors should bet the difference in yield between five-year and 10-year U.S. Treasuries narrows, because purchases by the Federal Reserve may offset upcoming sales of the longer-dated securities, BNP Paribas SA said.
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Greek bonds fell, leading weekly declines by securities from Europe’s periphery, as concern the nation will struggle to meet deficit targets pushed the extra yield over German securities to the highest in a month.
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German two-year government note yields jumped to the highest in more than a year this week on speculation the European Central Bank may act to stem inflation.
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