Germany’s 30-year bonds fell, pushing yields toward a two-month high, as optimism central banks will act to boost the global economy reduced the allure of holding the securities of Europe’s largest economy as a haven.
Two days after a senior government official said Spain’s access to debt markets was closed, the country will try to sell as much as 2 billion euros ($2.5 billion) of bonds at interest rates that will probably be higher than at its last auction of similar maturities.
German bunds rallied, driving five- and 10-year yields to record lows, as a backlash against austerity toppled the Dutch government and left French President Nicolas Sarkozy trailing in his re-election bid.
Portugal sold 1 billion euros ($1.3 billion) of 10-year bonds, garnering more demand than at previous offerings after it benefited from the European Union’s aid plan for the region’s most indebted countries.
Portugal’s borrowing costs fell at a sale of 762 million euros ($962 million) of six-month bills after the government said last week that it aims to narrow its budget deficit faster than previously planned.
German government bonds fell, pushing the yield on the benchmark 10-year security to a one- month high, as stocks rose after China said it will allow a more flexible yuan, curbing demand for the safest assets.