Italian Bonds Drop as Greek Concern Sparks Worst Week in a Year

Italian bonds fell, with 10-year yields set for the biggest weekly increase in more than a year, as prospects of Greece exiting its bailout combined with the threat of recession to sap demand for higher-yielding assets.

Spain’s government securities dropped for a third day before the country’s rating review by Moody’s Investors Service, a day after a debt sale fell short of its maximum target amid turmoil prompted by a surge in Greek yields. German 10-year bonds headed for a fifth week of gains as economic reports this week and gauges showing a decline in inflation expectations fueled concern the euro area is heading for recession.