Treasury 30-year bonds erased earlier gains on optimism that European authorities may soon devise long-term solutions for the region’s debt crisis. Benchmark 10-year notes pared their advance after European Commission President Jose Barroso said the European Union should bring forward the start of a permanent bailout fund and that it will present a study of options on introducing common bonds in coming weeks. “Bond yields have been unjustifiably low for a while and I guess the market is looking for a reason to get out of these levels,” said Peter Chatwell, a fixed-income strategist at Credit Agricole Corporate and Investment Bank in London. “What Barroso said is the catalyst for that. The crisis is not going to be over tomorrow, but what he said suggested leaders are coming up with various options to solve the problem.” The 30-year yield was little changed at 3.08 percent at 10:34 a.m. in London, according to Bloomberg Bond Trader prices. The 3.75 percent security due in August 2041 was at 113 1/8. Benchmark 10-year rates were also little changed, at 1.97 percent. The securities are poised for their third monthly gain, with the yield falling 25 basis points from the end of August. To contact the reporter on this story: Nicholas Reynolds in Tokyo at nreynolds2@bloomberg.net To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net

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