German Bunds Advance as Europe Governments Fail to Agree on Greek Payments
By Lukanyo Mnyanda - Jun 20, 2011 9:03 AM GMT+0200 Mon Jun 20 07:03:25 GMT 2011
German
government bonds advanced after European governments failed to agree on releasing a loan payment to
Greece, to prevent a default, boosting demand for the securities perceived as the euro region’s safest.
The gains pushed the 10-year bund yield to within two basis points of the lowest in more than five months. Euro-area ministers put off deciding whether to give Greece the full 12 billion euros ($17.1 billion) promised for July as part of last year’s 110 billion-euro lifeline, and instead pushed the country to cut the deficit and sell state assets. The MSCI Asia Pacific Index fell for a fourth day, declining by 0.6 percent, while futures on the Euro Stoxx 50 were 1.5 percent lower.
The 10-year bund yield dropped three basis points to 2.93 percent as of 7:59 a.m. in
London. It reached 2.91 percent on June 16, the least since Jan. 11. The 3.25 percent security due in July 2021 rose 0.295, or 2.95 euros per 1,000-euro ($1,423) face amount, to 102.775. Yields on two-year notes were four basis points lower at 1.48 percent. They dropped to 1.43 percent on June 16, the lowest since Feb. 22.
Greek 10-year bond yields climbed 16 basis points to 17.10 percent, while two-year yields were 67 basis points lower at 28.12 percent. Spanish 10-year yields were four basis points higher at 5.61 percent, and equivalent-maturity Italian yields also climbed four basis points, to 4.86 percent.
German government bonds have returned 0.4 percent this year, according to indexes compiled by the European Federation of Financial Analysts Societies and Bloomberg, while Treasuries handed investors 3.3 percent. Greek debt lost 19 percent.
(Bloomberg)
