Bloomberg News

German Two-Year Yield 1 Basis Point From Record Low Before ECB

January 12, 2012

Jan. 12 (Bloomberg) -- German two-year note yields were within one basis point of a record low before the European Central Bank reviews interest rates and as Italy and Spain seek to sell as much as 17 billion euros ($21.6 billion) of debt.

Ten-year bunds were little changed after a German report showed inflation in Europe’s largest economy slowed more than initially estimated last month. The ECB will leave its benchmark rate at 1 percent today, according to the median forecast of 53 economists in a Bloomberg News survey.

The two-year yield was little changed at 0.14 percent at 7:45 a.m. London time, after dropping to a record 0.134 percent yesterday. The 0.25 percent note maturing in December 2013 traded at 100.205. The 10-year bund yield climbed one basis point to 1.83 percent.

Germany’s inflation rate, calculated using a harmonized European Union method, fell to 2.3 percent from 2.8 percent in November, according to a report today. The rate was initially reported at 2.4 percent.

Spain is scheduled to auction bonds maturing in 2015 and 2016 today, while Italy is set to offer 12 billion euros of 136- and 364-day bills. Italy also plans to sell debt maturing in 2014 and 2018 tomorrow.

Bunds have handed investors a 0.1 percent return this year, after gaining 9.7 percent in 2011, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies. Treasuries lost 0.1 percent, the indexes show.

--Editors: Nicholas Reynolds

#<116040.3280269.># -0- Jan/12/2012 07:51 GMT

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

To contact the editor responsible for this story: Daniel Tilles at NI FRX NI EUROPE NI MARKETS NI BND NI SPAIN NI GER NI BON NI IRE NI PORTUG NI ECO NI GBN NI EUB NI GRE NI ECB

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