Bloomberg News

German Notes Decline for a Third Day; Saxony Inflation Quickens

September 28, 2011

Sept. 28 (Bloomberg) -- German two-year notes declined for a third day, while bunds pared their advance.

The two-year note yield increased two basis points to 0.56 percent as of 8:44 a.m. in London. The 10-year bund yield slipped less than one basis point to 1.95 percent, after falling to 1.92 percent.

Inflation in the German state of Saxony increased 2.6 percent in September from a year ago after rising an annual 2.4 percent in August, the state’s statistics office in Kamenz said today. Economists forecast that German inflation, calculated using a harmonized European Union method, will quicken to 2.6 percent from 2.5 percent, the median of 20 estimates in a Bloomberg News survey shows. The Federal Statistics Office in Wiesbaden will release that report, based on data from six states, later today.

German bonds and the securities of other so-called core euro-area nations rose this month as data signaled the region’s economy is at risk of slipping back into a recession and the sovereign-debt crisis worsened. Bunds have returned 2 percent this month, with French debt returning 1.4 percent, according to indexes compiled by the European Federation of Financial Analysts Societies and Bloomberg. Greek securities lost 23 percent, while Italy declined 2.7 percent, the indexes show.

--Editors: Daniel Tilles, Peter Branton

To contact the reporters on this story: Lucy Meakin in London at; Lukanyo Mnyanda in Edinburgh at

To contact the editor responsible for this story: Daniel Tilles at

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