German government bonds headed for a second weekly gain as stock markets declined amid concern that Greece will default on its debt, fueling demand for the region’s safest securities.
The 10-year bund yield was within two basis points of a five-month low as Greek Prime Minister George Papandreou failed to win support in parliament for more austerity. The two-year note yield was within two basis points of the lowest since Feb. 22. The MSCI Asia Pacific Index of stocks fell for a third straight day, losing 0.5 percent, while Japan’s Nikkei 225 (NKY) Stock Average index dropped 0.6 percent.
The 10-year bund yield was little changed at 2.92 percent as of 8:17 a.m. in London, down four basis points from June 10. It reached 2.91 percent yesterday, the lowest since Jan. 11. The 3.25 percent security due July 2021 fell 0.035, or 35 euro cents per 1,000-euro ($1,417) face amount, to 102.82. Yields on two- year notes were at 1.45 percent. They dropped to 1.43 percent yesterday.
German government bonds have returned 0.7 percent this year, according to indexes compiled by the European Federation of Financial Analysts Societies and Bloomberg, while Treasuries have returned a gain of 3.4 percent. Greek debt has lost 20 percent, the indexes show.
To contact the reporter on this story: Lukanyo Mnyanda in Edinburgh News at lmnyanda@bloomberg.net
To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net
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