European Bonds Climb, Pushing Yields to Lowest in Two Months, on Subprime

(Bloomberg) -- European government bonds gained,
pushing 10-year yields to a two-month low, as the U.S. subprime
mortgage crisis continued to stoke demand for the safest assets.

Bunds also advanced for a second day as the risk of owning
European corporate debt rose, according to traders of credit
default swaps, prompting investors to switch to safer government
securities. European 10-year yields dropped the most in 3 1/2
years last week as Federal Reserve Chairman Ben S. Bernanke said
the housing market woes may slow the wider U.S. economy.


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European Bond Yields Post Biggest Weekly Drop in 3 1/2 Years as Risks Rise

(Bloomberg) -- European government bonds rallied,
with 10-year yields posting their biggest weekly drop in 3 1/2
years, as the risk of owning corporate debt rose to a two-year
high and investors switched into the safest assets.

Bund yields slid to a seven-week low on concern defaults on
U.S. home loans to people with poor credit histories will spread
to the wider economy. Government debt around the world rose this
week after Bear Stearns Cos. told investors they weren't likely
to get their money back from two of its hedge funds that bet on
securities backed by subprime mortgages.


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European Government Bonds Fall on Speculation Growth Will Remain Resilient

(Bloomberg) -- European government bonds fell as
waning concern that defaults on U.S. subprime mortgages will hurt
the wider economy prompted investors to seek higher yields on
riskier assets such as stocks and emerging market debt.

Benchmark 10-year debt dropped, pushing yields up from a
week low, as shares in Asia rallied after a Chinese report that
showed the economy grew at the fastest pace in 12 years and as
European equities rose. Federal Reserve Chairman Ben S. Bernanke
yesterday predicted growth will pick up ``a bit'' next year.


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European Bonds Decline for Second Day on Stocks, Interest-Rate Outlook

(Bloomberg) -- European government bonds fell for a
second day as a surge in global equity markets eroded demand for
less risky assets, and on speculation the European Central Bank
will keep raising interest rates.

The drop in debt pushed 10-year yields up from near the
lowest in a week, as concern waned that the downgrading of
subprime mortgage-backed bonds in the U.S. may crimp growth in
the wider economy. Bonds also fell as traders bet the European
Central Bank will keep lifting borrowing costs to curb inflation.


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European Government Bonds Gain on Signs German, French Growth Is Slowing

(Bloomberg) -- European government bonds advanced
for a second day as signs of slowing growth in the euro region's
two biggest economies prompted investors to pare bets the
European Central Bank will raise interest rates again this year.

Ten-year bonds rose, pushing yields down from near a five-
year high, as reports showed German wholesale prices grew at the
slowest pace for two years in June and French manufacturing
declined in May for the first time in six months. Bonds were also
buoyed by speculation yields already reflect the prospects of
further rate increases by the ECB.


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European Government Bonds Head for Weekly Decline on Outlook for ECB Rates

(Bloomberg) -- European government bonds are set to
drop this week, extending the worst quarterly slide in almost
eight years, after European Central Bank President Jean-Claude
Trichet signaled policy makers may need to lift interest rates
further by year-end.

Benchmark debt has fallen, sending 10-year bund yields to
near a five-year high, as investors add to bets the ECB will lift
borrowing costs half a point by year-end. Bonds fell yesterday
after Trichet said inflation in the region needs ``careful
monitoring.'' The ECB earlier kept its key rate at 4 percent.


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European Government Bonds Gain as Global Growth, Inflation Concerns Ease

(Bloomberg) -- European government bonds advanced
for a fourth day, the longest winning run in almost four months,
as investors switched from riskier assets into safer fixed-income
securities.

Yields on 10-year bunds, Europe's benchmark, fell to the
lowest in two weeks as investors turn more risk averse amid
concern a declining housing market and losses related to subprime
mortgages in the U.S. will hurt global growth. Debt also gained
as European equity markets slid for a fifth day.


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European Bonds Advance as Producer Price Inflation Slows in Germany

(Bloomberg) -- European government bonds gained for
a second day after a report showed producer-price inflation in
Germany, Europe's biggest economy, held near the lowest in almost
three years in May.

Benchmark debt was also buoyed by a rally in Treasuries
after reports this week showed U.S. house construction declined
for the first time in four months, and confidence among
homebuilders dropped to the lowest since 1991. Ten-year bunds had
their biggest gain in almost two months yesterday as a report
showed German investor sentiment unexpectedly worsened.


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