Yields on two-year Danish government notes eased the most relative to similar-maturity German bunds in more than a week as demand for assets perceived to be safe from the euro zone’s debt crisis endured.
The yield on the 2 percent benchmark note due November 2014 fell two basis points to minus 0.113 percent as of 11:31 a.m. in Copenhagen. That left the yield 11 basis points lower than borrowing rates on bunds due December 2014. The spread was the most negative since Dec. 11, according to data available on Bloomberg.
“Our main scenario is for the euro-zone crisis to persist through next year, possibly even heat up again on occasion,” Jacob Graven, chief economist at Sydbank A/S said in a phone interview. “That means the haven trade will remain intact and that demand for krone assets will continue.”
Denmark’s haven appeal lies in a public debt burden that’s less than half the euro-zone average and a current account surplus. Even the Nordic nation’s twin housing and regional banking crises haven’t deterred investors eager to escape the turmoil plaguing euro-denominated assets.
The Danish economy expanded at a faster pace than first estimated in the third quarter as government and business spending grew. Gross domestic product increased 0.3 percent from the second quarter, versus a November estimate for 0.1 percent growth, the statistics office said today.
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