German Bonds Rise After Ebola and European Bank Stress

German government bonds rose, paring their first weekly drop in more than a month, before the European Central Bank publishes the results of its year-long examination of euro-area banks on Oct. 26.

The gains pushed down yields on benchmark 10-year bunds by the most in more than a week. Twenty-five lenders are set to fail the health check, with 105 passing, according to a draft communique of the final results seen by Bloomberg News. Demand for haven assets was also boosted by a case of Ebola in New York. Greek bonds extended their first weekly advance since early September. Spain’s securities rose before a review of the nation’s credit grade by Fitch Ratings.

“You will be swamped with information on Sunday,” said Jens Peter Soerensen, chief analyst at Danske Bank A/S in Copenhagen. There has been some “profit taking” before the results of the stress tests are released, he said.

Germany’s benchmark 10-year (GDBR10) yield fell two basis points, or 0.02 percentage point, to 0.89 percent at 4:03 p.m. London time. The yield reached 0.715 percent on Oct. 16, the least since Bloomberg started collecting the data in 1989. The 1 percent bund due in August 2024 rose 0.16, or 1.60 euros per 1,000-euro ($1,267) face amount, to 101.07.

via Bloomberg

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza