Italy’s Bonds Climb as Draghi Spurs Speculation of ECB Stimulus

Italy’s government bonds advanced for a second week, pushing the 10-year yield down to a record, amid speculation the European Central Bank will broaden its asset purchases to buy sovereign debt.

Austrian and French 10-year rates also dropped to records as ECB President Mario Draghi said yesterday that policy makers would be willing to widen the scope of the central bank’s purchases should the inflation outlook for the region diminish. Spain’s securities also rose for a second week as data showed a slowdown in manufacturing and services output in the currency bloc. Earlier this week, Draghi said buying government bonds could be a policy tool for expanding stimulus.