“Germany’s 10-year bunds rose for a second day as concern that U.S. policy makers will fail to avert a series of tax increases and spending cuts that may trigger a recession fueled demand for the safest fixed-income assets.
Benchmark 10-year bonds pared a weekly decline as U.S. House Republican leaders canceled a scheduled vote on Speaker John Boehner’s plan to allow higher tax rates for annual incomes above $1 million, throwing budget negotiations deeper into turmoil. Treasuries rose, while Italian 10-year securities dropped for second day.
“People are concerned again about the fiscal cliff,” said Ralf Umlauf, a research analyst at Landesbank Hessen-Thueringen in Frankfurt. “We see no signs of a solution and that is providing some support for bunds.”
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