German Two-Year Notes Rise as Inflation Slows, Denting Rate Bets
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German two-year notes rose after a report showed inflation in Europe’s largest economy unexpectedly eased this month, denting the case for higher interest rates from the European Central Bank.
Ten-year notes headed for their longest streak of weekly gains in more than a decade as French President Nicolas Sarkozy said bondholders need to share the burden of solving Greece’s fiscal woes. The advance pushed 10-year bund yields down to a four-month low after Fitch Ratings revised Japan’s credit outlook to negative. Belgian bonds fell as Dexia SA said it will take a charge of 3.6 billion euros ($5.1 billion) in the second quarter. Greek, Spanish and Italian bonds declined.