“Germany’s bonds fell, with 10-year yields rising to the highest level in two months, on speculation a U.S. job report today will add to signs global growth is gaining momentum and undermine demand for safer securities.
Benchmark bund yields headed for the biggest weekly increase since July after German retail sales increased more than economists forecast in November. Spanish and Italian notes rose, extending their largest weekly gains since September, as reports showed services in the two nations contracted at a slower pace last month. Investors should buy Europe’s so-called peripheral bonds should they decline, Bank of America Corp.’s Merrill Lynch Wealth Management said.
“Flight to safe havens is fading and we think we will see slightly better data out of Europe this quarter,” said Ralf Umlauf, a research analyst at Landesbank Hessen-Thueringen in Frankfurt. “Fading support for bunds is pushing yields up. The main focus today is on the U.S. payrolls data, which we think may surprise on the upside.”
Germany’s 10-year yield rose seven basis points, or 0.07 percentage point, to 1.55 percent at 12:16 p.m. London time, the highest level since Oct. 26. The 1.5 percent bond maturing in September 2022 fell 0.635, or 6.35 euros per 1,000-euro ($1,301) face amount, to 99.55.
The 10-year yield may increase to 1.70 percent by the end of March, Umlauf said. A Bloomberg survey of analysts predicts the rate will end the first quarter at 1.59 percent….”
If you enjoy the content at iBankCoin, please follow us on Twitter
