Italy, Spain Spreads Widen on Concern Crisis ‘Self-Fulfilling’

Italian and Spanish 10-year bonds dropped, pushing yields up to euro-era records versus benchmark German bunds, on concern that slowing growth will hamper efforts to tame the nations’ debt loads.

German 10-year yields touched an eight-month low amid speculation spending cuts included in a U.S. debt-limit compromise agreement will harm the global economy. Investors pared bets on higher euro-region borrowing costs as European producer-price inflation slowed for a second month.