Goldman Sees End to Narrowing Spreads in Europe Periphery

As a rally in the euro-area’s higher-yielding government bonds shows signs of cooling, Goldman Sachs Group Inc. joined investors saying the narrowing of yield spreads to German bunds is over.

Italian and Spanish 10-year government debt declined today, pushing yields on Italy’s securities up from near the record-low 2.626 percent set on July 30. Portuguese and Greek bonds also fell as a report showed euro-area services expanded less than initially estimated, underlining a sluggish recovery that may prompt investor concern the securities have climbed too far.