German government bonds rose, with 10-year securities gaining for an eighth day, after a report showing euro-area inflation unexpectedly fell to a four-year low boosted demand for fixed-income assets.
Benchmark yields dropped to the lowest level since August as separate data showed the unemployment rate in the region climbed to a record 12.2 percent in September. The annual inflation rate fell to 0.7 percent, the least since November 2009, from 1.1 percent in September, the European Union’s statistics office said. The median forecast in a Bloomberg survey of economists was for it to stay at 1.1 percent.
Germany’s 10-year yield dropped two basis points, or 0.02 percentage point, to 1.67 percent at 10:30 a.m. London time after falling to 1.66 percent, the lowest level since Aug. 8. The 2 percent bund due in August 2023 rose 0.205, or 2.05 euros per 1,000-euro ($1,367) face amount, to 102.995.
German bonds lost 1.1 percent this year through yesterday, according to Bloomberg World Bond Indexes. Spain’s securities returned 11 percent and Italy’s gained 6.2 percent.
Chart: WorldWideMarkets Alpha Trader