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Spanish, Italian Notes Jump on ECB Bets; Portugal’s Bonds Rise

Spanish and Italian notes advanced after European Central Bank President Mario Draghi was reported saying he would be comfortable buying three-year debt to lower borrowing costs for nations in financial distress.

Spain’s two-year yields declined to a five-month low while Italian rates fell for an eighth day on speculation a bond purchase plan will be announced at an ECB policy meeting this week. Longer-maturity bonds underperformed, with the extra yield investors demand to hold Spain’s 10-year securities instead of two-year notes reaching a record. Portuguese two-year yields fell by the most in four weeks, reaching the lowest level since March 2011. Austria sold five- and seven-year notes.