Bloomberg News

German Bunds Snap Four-Day Gain Before Ifo Data, Bill Auction

March 26, 2012

German government bonds snapped a four day advance before data that may show German business confidence held at a seven-month high this month.

German 10-year yields rose from near a one week low as Europe’s largest economy prepares to auction as much as 3 billion euros ($4 billion) of 12-month zero-coupon government bills. France is scheduled to offer as much as 6.9 billion euros of 84-, 161-day and 343-day bills.

The German 10-year yield rose two basis points, or 0.02 percentage point, to 1.88 percent at 7:13 a.m. in London. The 2 percent bond due January 2022 fell 0.15, or 1.50 euros per 1,000-euro face amount, to 101.04. The yield dropped 19 basis points last week, the most since the five days ended Dec. 16, and declined as low as 1.86 percent on March 26.

The Munich-based Ifo institute may say its business climate index, based on a survey of 7,000 executives, stayed at February’s reading of 109.6, according to the median estimate of 44 economists in a Bloomberg News survey. That matches the highest reading since July. A separate report may show Italian consumer confidence fell in March.

German bunds have handed investors a loss of 0.1 percent over the past year, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies. French bonds have gained 1.9 percent and Spanish securities have risen 1 percent, the indexes show.

To contact the reporter on this story: 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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