German Bunds Fall Before Confidence Report; Italian Bonds Rise

German bunds fell, pushing 10-year yields to the highest level in more than a week, before data this week that economists said will show the nation’s business confidence rose for a second month in December.

Italian 10-year government bonds advanced for a second day. The Munich-based Ifo institute’s business climate index climbed to 102 from 101.4 in November, according to the median estimate of 43 analysts in a Bloomberg News survey, before the data is released on Dec. 19. European Central Bank President Mario Draghi will address European parliament legislators on recent developments in the euro area’s sovereign-debt crisis at 2:30 p.m. in Brussels.

“The Ifo is the highlight of the week and if it is improving like other indicators it should put some pressure on bunds,” said Christian Reicherter, an analyst at DZ Bank AG in Frankfurt. “There is a short-term downtrend in bunds.”

German 10-year bund yields increased two basis points, or 0.02 percentage point, to 1.37 percent at 9:07 a.m. London time, after rising to 1.39 percent, the highest since Dec. 5. The rate climbed five basis points last week. The 1.5 percent bond maturing in September 2022 dropped 0.185, or 1.85 euros per 1,000-euro ($1,316) face amount, to 101.19.

Italy’s 10-year yields fell one basis point to 4.59 percent, while the nation’s two-year rate dropped four basis points to 2.02 percent. The yield on similar-maturity Spanish notes declined two basis points to 2.86 percent.

France is scheduled to sell as much as 6.3 billion euros of bills today.

German bunds returned 4.1 percent this year through Dec. 14, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies. Italian debt earned 20 percent while Spanish bonds gained 5.3 percent.

To contact the reporters on this story: Neal Armstrong in London at narmstrong8@bloomberg.net; Emma Charlton in London at echarlton1@bloomberg.net

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

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