ECONOMY

German bunds are little changed before euro-area labor report

Germany’s 10-year bonds were little changed, set for their fifth weekly gain out of six, before a report that economists said will show the jobless rate in the euro area climbed to a record in October.

The benchmark bund yield was within three basis points of its lowest since Nov. 20. Unemployment in the 17-nation region rose to 11.7 percent from 11.6 percent in September, the European Union’s statistics office in Luxembourg will say Friday, according to the median prediction of 34 economists in a Bloomberg News survey.

The German 10-year yield rose one basis point, or 0.01 percentage point, to 1.38 percent at 7:25 a.m. London time. It reached 1.35 percent two days ago, the lowest since Nov. 20. The 1.5 percent bond due September 2022 traded at 101.115. The rate has dropped six basis points this week. The two-year note yield was at 0.007 percent.

Bunds climbed this week as reports signaling Europe’s recession is deepening countered finance ministers’ agreement to ease the terms of Greece’s bailout. They suspended the nation’s interest payments for a decade, gave the country more time to repay, and engineered a bond buyback to cut borrowing costs after a meeting in Brussels on Nov. 27.

The inflation rate in the 17-member euro region fell to 2.4 percent this month, from 2.5 percent in October, according to a separate Bloomberg survey before Friday’s release. That would be the lowest rate in four months.

German bonds returned 3.8 percent this year through Thursday, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies. Spanish debt gained 5.1 percent and Italy’s earned 20 percent.

[Bloomberg]