German Bunds Fall as Court Backs Euro Rescue; Italian Bonds Rise

German bunds dropped the most in a week as stocks rose and the nation’s top court backed the government’s participation in euro-area bailouts, reducing demand for the region’s safest assets.

Italian and Spanish bonds rallied, with Italy’s 10-year yields falling the most since the European Central Bank began buying the nation’s debt on Aug. 8. Greek 10-year bond yields climbed above 20 percent for the first time as finance chiefs from three of the region’s AAA rated countries failed to break a deadlock over Finland’s demands for collateral in return for aiding the nation.