German Bond Yields Fall to Record After Spain Downgrades
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German two-, five-, 10- and 30-year bond yields dropped to all-time lows after Moody’s Investors Service lowered the credit ratings of 16 Spanish banks, spurring demand for Europe’s safest government debt.
Benchmark bunds headed for a fifth weekly advance as a report showed German producer-price inflation slowed in April. Banco Santander SA and Banco Bilbao Vizcaya Argentaria SA were among lenders cut by Moody’s, which cited economic weakness and Spain’s budget strains. Separately, Greece’s credit grade was lowered one level by Fitch Ratings. The cost of insuring Spanish government debt against default rose to a record high.