German Yields Climb Most Since 2006 as Euro Area Exits Recession

German government bonds slumped last year, with 10-year yields rising the most since 2006, as the euro area’s emergence from its longest recession on record damped demand for the region’s safest assets.

Two-year notes dropped for the first time since 2007, with the rate rising from less than zero, as the threat of the 17-nation currency bloc splintering diminished. The economies of the countries that share the euro will expand 1 percent in 2014 and 1.4 percent in 2015, after contracting 0.4 percent in 2013, according to Bloomberg surveys of analysts. Bunds fell along with Treasuries as the Federal Reserve said it would reduce its $85 billion in monthly asset purchases.