German 10-Year Bunds Decline Before Spain Debt Sale, EU Summit

Germany’s 10-year government bonds fell a fourth day before Spain auctions up to 4.5 billion euros ($5.9 billion) of securities and European Union leaders gather for the start of a two-day summit in Brussels.

The decline pushed the 10-year yield to the highest level in four weeks. Spanish 10-year yields fell to a more than six- month low yesterday after Moody’s Investors Service said Oct. 16 it would keep the nation’s credit rating at investment grade. France is scheduled to sell as much of 10.5 billion euros of notes and inflation-linked bonds today, while Ireland auctions three-month bills.

German 10-year bund yields rose three basis points, or 0.03 percentage point, to 1.66 percent at 7:21 a.m. London time, the highest since Sept. 19. The 1.5 percent bond due September 2022 fell 0.22, or 2.20 euros per 1,000-euro face amount to 98.57. The two-year yield added less than one basis point to 0.11 percent.

Spain’s 10-year yield tumbled as much as 34 basis points to 5.46 percent yesterday, the lowest since April 4, and was at 5.47 percent today.

The Iberian nation plans to sell bonds maturing between 2015 and 2022. It last auctioned the securities due in 2022 on Sept. 20 at an average yield of 5.67 percent.

France will auction as much as 8 billion euros of notes maturing between two- and five years, and up to 2.5 billion euros of inflation-linked bonds due in 2021.

German bonds returned 2.2 percent this year through yesterday, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies. Spanish securities advanced 3.5 percent, while French debt earned 8.1 percent.

To contact the reporters on this story: David Goodman in London at dgoodman28@bloomberg.net; Lucy Meakin in London at lmeakin1@bloomberg.net

To contact the editor responsible for this story: Paul Dobson at pdobson2@bloomberg.net

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