Spanish Bond Yields Fall to 7-Week Low on ECB Intervention Bets

Spanish bonds gained, pushing 10-year yields to the lowest in seven weeks, on optimism the European Central Bank is moving toward a crisis-fighting plan that will limit borrowing costs for indebted nations.

German bunds fell for the first time in three days after Spiegel magazine reported yesterday the ECB would be prepared to buy government debt to enforce a cap on yields, without saying where it got the information. Spanish and Italian bonds pared gains after the German Bundesbank stepped up its opposition to the ECB’s plan to embark on government debt purchases.