“Spanish and Italian bonds rose on speculation the European Central Bank will augment the firepower of the region’s bailout fund as policy makers step up efforts to contain contagion from the debt crisis.
The gain pushed Spain’s two-year note yield down from a euro-era record after ECB council member Ewald Nowotny said there are arguments in favor of giving the European Stability Mechanism a banking license. German bunds fell for a third day as the nation sold 2.32 billion euros ($2.81 billion) of 30-year debt at a record-low yield. Business confidence in Europe’s biggest economy slid to the lowest level in more than two years in July, according to a report.”
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