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Thứ Ba, 13 tháng 8, 2013

German Bonds Slump With France's as Growth Signs Sap Safety Bid - Bloomberg

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Germany’s government bonds fell, pushing 10-year yields to the highest level in six weeks, before a survey that analysts predict will show a gauge of investor confidence in Europe’s largest economy improved in August.


Benchmark bunds dropped for a second day as signs of economic recovery in the euro region damped demand for safer assets. The extra yield investors demand to hold Italian 10-year bonds instead of similar-maturity German ones shrank to the narrowest since July 2011. Greece is scheduled to sell 1 billion euros ($1.33 billion) of three-month bills.


“We are underweight on German bunds as we have a negative outlook for the asset over the next three to six months,” said Willem Sels, U.K. head of investment strategy at HSBC Private Bank in London. “The German economy is moving in the right direction. On the periphery, the news is generally positive. That tightens credit spreads and possibly puts upward pressure on bund yields as well.”


The 10-year bund yield increased four basis points, or 0.04 percentage point, to 1.74 percent at 8:26 a.m. London time, the highest since July 1. The 1.5 percent security due in May 2023 fell 0.315, or 3.15 euros per 1,000-euro face amount, to 97.885.


The ZEW Center for European Economic Research’s index of German investor and analyst expectations climbed to 39.9 this month from 36.3 in July, according to a Bloomberg News survey. Gross domestic product in the euro area grew 0.2 percent in the three months through June, ending six quarters of contraction, a separate Bloomberg survey showed before the data tomorrow.


“We’re not expecting a boom in Europe, but there is a momentum shift and you’re going to feel it in markets and the world economy,” said Joseph Lupton, a senior global economist at JPMorgan Chase & Co. in New York who also has worked at the Federal Reserve. “There’s a change in perception from when people didn’t see a way out of the crisis to now seeing growth.”


The yield on Italy’s 10-year bonds was little changed at 4.16 percent. The spread over German bunds shrank to as little as 242 basis points, the narrowest since July 22, 2011. The difference widened to a euro-era record of 575 basis points in November 2011.


Germany is scheduled to sell 4 billion euros of 10-year bunds tomorrow. The nation last sold the securities on July 17 at an average yield of 1.57 percent, compared with 1.55 percent at a previous auction on June 19.


German bonds lost 1.4 percent this year through yesterday, according to Bloomberg World Bond Indexes. Italy’s securities returned 4.4 percent and Spain’s rose 7.3 percent.


To contact the reporters on this story: Anchalee Worrachate in London at aworrachate@bloomberg.net; Emma Charlton in London at echarlton1@bloomberg.net


To contact the editor responsible for this story: Nicholas Reynolds at nreynolds2@bloomberg.net







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