German Bonds Fall Before Business Confidence Data; Spain Drops

Germany’s government bonds fell for a third day before a report economists said will show business confidence in the nation increased this month.

The benchmark 10-year yield reached the highest level in more than a year. The Ifo institute’s business climate index, based on a survey of 7,000 executives, climbed to 105.9 from 105.7 in May, according to the median estimate of 46 analysts in a Bloomberg News survey. Spain’s 10-year yield rose above 5 percent for the first time in 12 weeks. Belgium is scheduled to auction as much as 2.8 billion euros ($3.7 billion) of debt due between 2018 and 2026.

Germany’s 10-year bund yield rose six basis points, or 0.06 percentage point, to 1.78 percent at 7:37 a.m. London time, the highest since April 18, 2012. The 1.5 percent security due in May 2023 fell 0.485, or 4.85 euros per 1,000-euro face amount, to 97.485. The nation’s two-year note yield added two basis points to 0.29 percent.

The rate on Spain (GSPG10YR)’s 10-year bond climbed 13 basis points to 5.04 percent, rising above 5 percent for the first time since April 2.

Belgium last sold the 2.25 percent bonds maturing in June 2023 on May 28 at an average yield of 2.143 percent, according to data compiled by Bloomberg, up from a record-low auction yield of 1.971 percent in April.

German bonds handed investors a loss of 1.9 percent this year through June 21, according to Bloomberg World Bond Indexes. Spanish securities returned 4.4 percent, while Belgian bonds dropped 1.9 percent, the indexes show.

To contact the reporters on this story: David Goodman in London at dgoodman28@bloomberg.net; Neal Armstrong in London at narmstrong8@bloomberg.net

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

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