Italian and Spanish Bond Yields Fall on Hopes a Greek Debt Swap Goes Off Smoothly

“Italy’s bonds rose for the first time in three days as Societe Generale SA joined companies saying they would take part in Greece’s debt swap.

Spanish government securities also advanced after European Union Economic and Monetary Commissioner Olli Rehn was said to be confident that enough private investors will sign up to the bond exchange. German 10-year yields were within three basis points of a seven-week low after factory orders unexpectedly declined in January. Germany sold 3.3 billion euros ($4.33 billion) of five-year notes.

“The news related to the Greek deal isn’t fantastic but there’s nothing that looks like it might be derailing the whole thing,” which is helping higher-yielding assets, said Marc Ostwald, a strategist at Monument Securities Ltd. in London. “The German factory orders don’t make for great reading, there’s a loss of momentum and that means there are a lot of people who are a little bit wary, so trading will be choppy.”

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