European Bonds Advance as Merkel Says Greek Debt Relief Possible

Italian and Spanish government bonds led an advance among European sovereign securities as optimism on Greece’s bailout and falling commodity prices boosted demand for the euro area’s peripheral debt.

In her first public comments since the region’s finance ministers backed an 86 billion-euro ($95 billion) aid package, German Chancellor Angela Merkel said her country would consider debt relief for Greece to ensure the International Monetary Fund joins in the third round of bailouts. Greek bonds rose as investor concern eased that the nation can make its debt payments. Peripheral bonds outperformed securities from Europe’s core as an index of commodities fell to the lowest level in more than 13 years.