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Euro-Area Yield Curves Flatten; Greek 3-Year Rate Exceeds 20%

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The rally in lower-rated euro-area government bonds has pushed yields down to levels that look “absurd,” according to KBC Bank NV. That’s not enough for investors to abandon the securities as European Central Bank purchases enter their second week.

Italy and Spain led an advance in longer-maturity debt before the ECB provides details of its purchases Monday. Executive Board member Benoit Coeure said last week that the average maturity of central-bank purchases has been nine years, and people familiar with the arrangements said on Monday that securities of KfW, Germany’s development bank, were among those being bought. Greece’s three-year yield rose above 20 percent for the first time in a month as the nation repaid a loan from the International Monetary Fund.