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Spanish Notes Drop as Demand Falls at Sale Before EU Elections

Spanish five-year notes fell, reversing an earlier gain, as demand waned at an auction of the securities before the start of elections for the European Parliament that may boost parties opposed to austerity.

Spain’s 10-year bonds erased an advance that had pushed yields down by as much as seven basis points. Investors bid for 1.91 times the amount of 2019 securities sold, down from a bid-to-cover ratio of 2.31 at a previous sale on April 24. Germany’s bunds rose even as a report showed the nation’s services growth increased this month. France’s bonds advanced as that country’s manufacturing and services output unexpectedly shrank in May.