Spanish Bonds Surge After Auction; Bunds Drop on Rate Decision

Spain’s government bonds surged, with two-year yields falling to the lowest level since October 2010, after the nation sold more securities than planned at its first debt auction this year.

Spanish 10-year yields fell below 5 percent for the first time since March and Italian bonds also rallied as optimism the European financial crisis is easing spurred demand for the debt of so-called peripheral countries. German bonds slumped, with two- and 10-year yields climbing to the highest levels in 11 weeks, after the European Central Bank refrained from cutting its key interest rate and President Mario Draghi said the decision was “unanimous.”