German Bonds Rise for Third Day After Consumer-Confidence Report

Germany’s 10-year government bonds rose for a third day as a report showed a gauge of consumer confidence in Europe’s largest economy will decline for the first time in eight months in September.

Benchmark 10-year yields approached a two-week low after market-research company GfK SE (GFK) said its consumer-sentiment index, based on a survey of about 2,000 people, will drop to 6.9 from 7 in August. Economists forecast a gain to 7.1, according to the median estimate in a Bloomberg News survey. Italy is scheduled to sell 8.5 billion euros ($11.4 billion) of six-month bills as Prime Minister Enrico Letta’s government meets to approve the reduction of a real-estate tax.

Germany’s 10-year bund yield dropped two basis points, or 0.02 percentage point, to 1.83 percent as of 7:19 a.m. London time. The rate fell to 1.80 percent on Aug. 15. The 1.5 percent security due in May 2023 rose 0.16, or 1.60 euros per 1,000-euro face amount, to 97.10.

Italy last sold 184-day bills on July 29 at an average yield of 0.799 percent, compared with a rate of 0.599 percent at a previous auction on July 10.

German bonds lost 2.1 percent this year through yesterday, according to Bloomberg World Bond Indexes. Italian securities returned 3.3 percent, while Spain’s earned 7.6 percent.

To contact the reporter on this story: Morgane Lapeyre in London at mlapeyre@bloomberg.net

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

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