Bloomberg News

German Bonds Rise Before Inflation Report, Snapping 3-Day Drop

September 28, 2011

Sept. 28 (Bloomberg) -- German 10-year bonds rose, snapping a three-day decline, before a report that economists said will show the nation’s consumer prices dropped in September.

Two-year notes, perceived to be among Europe’s safest securities, gained for the first time in three days after Bild reported that Germany’s government privately anticipates a default by Greece as early as this year.

The 10-year bund yield dropped three basis points to 1.93 percent at 7:19 a.m. in London. The yield has climbed from a record low 1.636 percent on Sept. 23. The 2.25 percent security due September 2021 gained 0.285, or 2.85 euros per 1,000-euro ($1,358) face amount, to 102.860. Two-year yields fell one basis point to 0.52 percent.

Futures on the Standard and Poor’s 500 Index declined 0.1 percent.

German consumer prices declined 0.1 percent from August, when they were unchanged, the Federal Statistics Office will say today, according to the median estimate of 29 economists surveyed by Bloomberg News.

Bunds and securities of other so-called core countries gained this month as reports signaled the region’s economy is slipping back into a recession and the sovereign-debt crisis worsened. Bunds have gained 2 percent this month, according to indexes compiled by the European Federation of Financial Analysts Societies and Bloomberg.

--Editors: Nicholas Reynolds

To contact the reporters on this story: Lukanyo Mnyanda in Edinburgh at lmnyanda@bloomberg.net; Lucy Meakin in London at lmeakin1@bloomberg.net

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


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