“Spain’s government bonds advanced, pushing 10-year borrowing costs to the lowest in more than six months, after Moody’s Investors Service said it would keep the nation’s credit rating at investment grade.
Italian and Portuguese securities also rallied amid optimism the euro region is making progress to contain the debt crisis. Moody’s cited a reduction in the risk of Spain losing market accessbecause of the European Central Bank’s willingness to buy the nation’s bonds. German 10-year bunds fell for a third day while two-year notes were little changed after the nation sold 4.19 billion euros ($5.5 billion) of the securities.
Pedestrians pass a Spanish national flag on Cibeles square in Madrid. Photographer: Angel Navarrete/Bloomberg
Moody’s decision is “obviously quite a positive development, as is reflected in this morning’s price moves,” said Brian Barry, an analyst at Investec Bank Plc in London. “I would expect Spanish and Italian debt to trade better today, and for the positive tone to spread across to other risk assets, with safe havens to come back a bit.””
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