German Long-Dated Bonds Climb as Oil Drops on Iran Nuclear DealLucy Meakin and Anooja Debnath
German government bonds rose on speculation a nuclear deal between Iran and world powers would push down inflation by boosting the oil supply, making the fixed-income payments of debt more attractive.
Germany’s 30-year bunds led the gains after Iran, once the second-biggest producer in the Organization of the Petroleum Exporting Countries, was said to have agreed to curb its nuclear program in return for an easing of international sanctions. French and Austrian bonds rose, while those of Italy and Spain were little changed, as investors weighed Greece’s ability to implement reforms needed for a bailout.
“One thing that’s driving the market is Greece and the other is lower oil prices,” said Christian Reicherter, an analyst at DZ Bank AG in Frankfurt. “There’s still uncertainty about Greece with several problems unresolved. This is currently driving bund futures up and yields down.”
The 30-year German bund yield dropped five basis points, or 0.05 percentage point, to 1.62 percent at 9:25 a.m. London time. The 2.5 percent security due in August 2046 advanced 1.285, or 12.85 euros per 1,000-euro ($1,100) face amount, to 121.31.
Diplomats reached an agreement on Iran’s nuclear program in Vienna, according to an official involved in the talks, who asked not to be identified and didn’t elaborate on the details. Brent, the global crude-oil benchmark, tumbled as much as 2.1 percent.
France’s 10-year yield fell two basis points to 1.23 percent, while Austria’s slipped two basis points to 1.20 percent. Equivalent Spanish yields were little changed at 2.11 percent.
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