Euro Bonds Rally as U.S. Manufacturing Slump Trumps Local Data
- German, Italian securities erase losses made earlier in day
- Bonds had fallen on strong regional factory, jobs figures
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Government bonds rebounded from Germany to Italy, climbing alongside Treasuries, as an unexpected contraction in U.S. manufacturing backed speculation the Federal Reserve will only raise interest rates gradually.
The Institute for Supply Management’s index for factory output in November unexpectedly dropped to the lowest reading since the last recession, fueling investor appetite for the safety of government debt. European bonds declined earlier after data showed the euro region’s unemployment rate fell to an almost four-year low while manufacturing output expanded at the fastest pace since April 2014.