Spanish Yields at 6% on Greek Deadlock; Bunds Set Records

Spanish bonds slumped, pushing 10-year yields above 6 percent, as Greek leaders struggled to form a new government amid speculation they may decide to withdraw the nation from the single currency bloc.

German bund yields dropped to records, with the 10-year rate falling below 1.5 percent for the first time, as signs the euro-area debt crisis is worsening boosted demand for the region’s safest assets. The extra yield investors demand to hold Spain's 10-year bonds instead of similar-maturity bunds reached the widest in five months, while the spread between French and Spanish yields expanded to the most since 1996. Germany got bids for more than its maximum target at a five-year note sale today.