European Bonds Fall on Praet Comments Amid Fed Taper Speculation
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European government bonds fell, led by Spain and Italy, after European Central Bank policy maker Peter Praet said the region’s banks may reduce purchases of sovereign debt to lower their risk profile.
Spanish five-year yields climbed the most in five weeks after falling to the lowest level since 2005 yesterday as investors weighed the prospects of the Federal Reserve cutting asset purchases as soon as this month. Italy’s 10-year bonds snapped a four-day advance, while German two-year yields climbed to the highest level in three months. Investors have boosted holdings of the region’s higher-yielding bonds versus those of core nations in the past two weeks, JPMorgan Chase Bank said.