German 10-Year Yields Fall to Record on ECB; Italian Bonds Drop

German 10-year bund yields fell to a record low after European Central Bank President Jean-Claude Trichet said “downside risks” to the economy have intensified and inflation concerns had eased.

Italian bonds declined after the nation’s Senate approved a revised 54 billion-euro ($75.6 billion) austerity plan as the government seeks to convince investors it’s serious about cutting its deficit. French bonds gained as the ECB cut its euro-area economic growth forecasts for this year and next. The euro-region’s economy faces “particularly high uncertainty,” Trichet said at a press conference in Frankfurt after the ECB kept its benchmark interest rate at 1.5 percent.