Spanish Bonds Gain as Debt Sale Beats Target; Bunds Fall

Spanish bonds surged, driving 10-year yields down by the most in more than two weeks, after the government beat its maximum target at a debt sale, easing concern the nation may be forced to seek international aid.

Yields on Spain’s two- and five-year securities tumbled by at least 30 basis points and 10-year bonds extended its longest rally since February after Chancellor Angela Merkel said Germany is ready to back the use of existing euro-area instruments to help stabilize the 17-nation currency bloc. French bonds slid after an auction of 7.8 billion euros ($9.8 billion) of debt. German, Austrian, Belgian and Dutch bonds fell as a Chinese interest-rate cut damped demand for the region’s safest assets.