“Spanish government securities declined, with the 10-year debt falling for the first time in three days, after a report showed euro-area industrial production unexpectedly shrank in November.
Italy’s bonds also dropped after a report showed factory output in the nation slid more than economists forecast. German bunds rose for the first time in three days, paring their worst start to a year since the introduction of the euro in 1999 as investors returned to the region’s safest assets. French two- year notes were little changed as the nation prepares to sell as much as 7.2 billion euros ($9.62 billion) of bills.
“There might be a little bit of a reversal” in Italian and Spanish bonds, said Elisabeth Afseth, a fixed-income analyst at Investec Bank Plc in London. “I doubt that there is any major change in trend. If we get continual setbacks and weak economic data then they might struggle.”
Spanish 10-year yields rose eight basis points, or 0.08 percentage point, to 4.97 percent at noon London time. The 5.85 percent bond due January 2022 fell 0.58, or 5.80 euros per 1,000-euro face amount, to 106.315. The yield touched 4.84 percent on Jan. 11, the lowest since March 1.
The yield on similar-maturity Italian bonds rose two basis points to 4.15 percent, after sliding to 4.09 percent on Jan. 11, the least since Nov. 10, 2010.
Industrial production in the 17-nation euro area dropped 0.3 percent from October, when it declined a revised 1 percent, the European Union’s statistics office in Luxembourg said today. Economists had forecast an increase of 0.2 percent, according to the median of 37 estimates in a Bloomberg News survey….”
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