German Bonds Surge as ECB Cuts Rates Without Supporting Spain
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German two-year note yields fell the most this year, pushing the rate below zero, after the European Central Bank cut interest rates and investors sought haven assets as the region’s financial woes deepened.
Spanish 10-year bonds posted their first weekly decline since June 15, pushing the yield to more than the 7 percent level that prompted Greece, Ireland and Portugal to seek sovereign bailouts. Austrian, Dutch, Belgian and French two-year yields fell to record lows. While the ECB reduced borrowing costs, it refrained from additional steps to cap debt yields such as buying sovereign bonds.