The euro area’s higher-yielding government bonds are emerging as a haven from emerging-market turmoil as the prospect of greater stimulus from the European Central Bank underpins demand for the securities.
A five-year squeeze on living standards is coming to an end, providing a boost for Prime Minister David Cameron as he battles opposition claims that ordinary Britons are facing a “cost of living crisis.”
Italy’s government bonds rose, pushing 10-year yields to a record low, amid speculation demand from local investors at a sale of inflation-linked debt will be reinforced by overseas funds as the economy improves.
European government bonds rose, with Portuguese 10-year yields dropping below 4 percent for the first time since 2010, as data showing Spanish consumer prices fell this month buoyed the case for monetary stimulus.
German government bonds snapped their biggest advance in almost two weeks amid speculation an auction of 30-year securities will add to evidence demand for fixed-income assets is waning as the economy improves.
Germany’s bonds declined, with 10- year yields rising from near the lowest in seven months, as tensions over Crimea eased after President Vladimir Putin said there was no immediate need to send Russian troops to Ukraine.
Portuguese bonds dropped and German 10-year government debt yields reached a 20-month high after the Iberian nation sought a bailout and investors bet the European Central Bank will raise interest rates today.
Irish bonds tumbled for a 10th consecutive day and the extra yield investors demand to hold the debt instead of benchmark German bunds reached a record on concern the nation is struggling to redress its budget deficit.