Bloomberg News

German 10-Year Yields Near Five-Month Low Before ZEW Report

June 21, 2011

June 21 (Bloomberg) -- German 10-year government bond yields were near their lowest level since January before a report economists said may show investor confidence fell, strengthening the case for interest rates to be left unchanged.

The two-year yield snapped two days of increases. The ZEW Center for European Economic Research in Mannheim will say its index of investor and analyst expectations fell to minus 3 in June from 3.1 in May, according to the median prediction of economists in a Bloomberg News survey. Greek bonds declined.

The 10-year bund yield was little changed at 2.97 percent as of 8:11 a.m. in London. It reached 2.91 percent on June 16, the lowest level since Jan. 11. The 3.25 percent security due July 2021 fell 0.020 or 20 euro cents per 1,000-euro ($1,435) face amount, to 102.410. Yields on two-year notes were at 1.52 percent. They dropped to 1.43 percent last week, the least since Feb. 22.

German government bonds have returned 0.3 percent this year, according to indexes compiled by the European Federation of Financial Analysts Societies and Bloomberg, while Treasuries gained 3.3 percent. Spanish debt has gained 1.7 percent, while Greek securities lost 19 percent, the indexes show.

The 10-year Greek yield increased 15 basis points to 17.49 percent, while that on the two-year security was 20 basis points higher at 28.81 percent. The two-year yield increased to 30 percent last week for the first time.

--Editors: Mark McCord, Keith Campbell

To contact the reporters on this story: Keith Jenkins in London at kjenkins3@bloomberg.net; Lukanyo Mnyanda in Edinburgh News at lmnyanda@bloomberg.net

To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net


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