BLBG: European Bonds Decline as 10-Year Yields Near 3% Deter Buyers
European government bonds snapped two days of gains as a 30 basis-point drop in 10-year yields within a month deterred buyers in the run-up to debt sales from France and Spain this week.
Ten- and 30-year securities led the declines as stocks rose after Australia’s central bank unexpectedly halted its most aggressive sequence of interest-rate cuts, boosting demand for higher-yielding assets. France and Spain will sell as much as 11 billion euros ($14 billion) of bonds on March 5.
“European bonds are looking a bit expensive at these yield levels,” said Orlando Green, a fixed-income strategist in London at Calyon, the investment-banking unit of Credit Agricole SA. “There are problems in the euro zone, but they’re not as severe as those in the U.K. and the U.S.”
The yield on the 10-year German bund, Europe’s benchmark government security, rose 2 basis points to 3.05 percent as of 7:58 a.m. in London, after falling by almost 30 basis points in the past month. The price of the 3.75 percent security due January 2019 fell 0.16, or 1.6 euros per 1,000-euro ($1,259) face amount, to 105.88.
The yield on the two-year German note was little changed at 1.20 percent. Bond yields move inversely to prices.
