German Bunds Fall, 10-Year Yields Rise 7 Basis Points to 1.38%

German government bonds declined after U.S. lawmakers passed a bill that averted spending cuts and tax increases threatening the world’s largest economy, damping demand for the safest assets.

Yields rose as the U.S. House passed a bill undoing income tax increases for more than 99 percent of households, giving a victory to President Barack Obama even as Republicans vowed to fight him in coming weeks for spending cuts in exchange for raising the debt ceiling.

Benchmark 10-year bund yields climbed seven basis points, or 0.07 percentage point, to 1.38 percent at 7:32 a.m. London time. Two-year note yields advanced two basis points to zero percent.

German bonds returned 4.5 percent last year, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies.

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