“Spanish government bonds rose, pushing two-year note yields to a 2 1/2-year low, as the nation sold more debt than its maximum target at an auction, underscoring demand for higher-yielding euro-region assets.
Italian bonds advanced for a fourth day after a report showed the nation’s services sectorcontracted less than economists forecast last month. German 10-year bund yields were about two basis points from the lowest since August after the European Central Bank left its key refinancing rate at 0.75 percent. France auctioned 10-year bonds at a record-low yield.
“It was a fairly good auction in Spain,” said Michael Leister, an interest-rate strategist at Commerzbank AG in London. “The size sold was above the top of the range. It confirms Spain’s access to funding is very robust and that should support peripheral debt.”
Spain’s two-year note yields dropped seven basis points, or 0.07 percentage point, to 2.13 percent at 12:47 p.m. London time, after reaching 2.07 percent, the lowest since October 2010. The 2.75 percent security maturing in March 2015 rose 0.14, or 1.40 euros per 1,000-euro ($1,281) face amount, to 101.19.
The Spanish 10-year bond yield declined four basis points to 4.88 percent, while the rate on similar-maturity Italian debt fell eight basis points to 4.51 percent.