“Italian 10-year bonds fell for the first time in seven days as a report showed European services and manufacturing output shrank more than analysts estimated, underlining the fragility of the region’s economy.
Italy’s two-year yields climbed by the most in three weeks as Greece’s private creditors prepare to decide this week whether to sign off on the nation’s debt restructuring. Spanish bonds fell amid concern about the quality of the collateral the European Central Bank has accepted in return for three-year loans to banks. German 10-year bond yields reached a six-week low afterChina cut its growth target, underpinning demand for safer assets.
“The factoring in of an increase in growth is yet to come in the European market and we need to clear up a lot of uncertainty first,” said Peter Chatwell, a fixed-income strategist at Credit Agricole Corporate & Investment Bank in London. “There are still other sources of uncertainty in the periphery and that’s going to keep core markets well supported,” he said.
Italy’s 10-year yield climbed three basis points, or 0.03 percentage point, to 4.93 percent at 10:50 a.m. London time. The 5 percent bond due March 2022 dropped 0.2, or 2 euros per 1,000 euro ($1,317) face amount, to 100.99. Two-year yields rose two basis points to 1.77 percent.
The Italian 10-year rate has declined more than 2 percentage points over the past eight weeks, in the longest run of declines since November 1998.
Composite Index
A euro-area composite index based on a survey of purchasing managers in both industries dropped to 49.3 in February from 50.4 the previous month, London-based Markit Economics said today. That’s below an initial figure of 49.7 published on Feb. 22. A reading below 50 indicates contraction….”
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