26 února 2009

26/2 German government bonds dropping for 2nd day...

German 10-year government bonds fell for a second day after an industry survey showed consumer confidence in Europe’s biggest economy unexpectedly rose for a sixth month.

The declines pushed the yield on the 10-year bund to the highest level in three days as European stock markets rallied, sapping demand for the relative safety of fixed-income assets.
Economists forecast a government report today will show the rate of inflation in Germany dropped this month to the lowest level in almost six years.

The yield on the 10-year bund, Europe’s benchmark government security, advanced five basis points to 3.04 percent by 8:02 a.m. in London. The price of the 3.75 percent security due January 2019 slid 0.37, or 3.7 euros per 1,000-euro ($1,272) face amount, to 106.00.

The yield on the two-year German note rose four basis points to 1.29 percent. Bond yields move inversely to prices.

GfK AG’s confidence index for March, based on a survey of about 2,000 people, climbed to 2.6, the Nuremberg-based market- research company said today. Economists expected a drop to 2, the median of 22 estimates in a Bloomberg survey showed.

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