Italian and Spanish government bonds rose for a fourth week, the longest streak since May, after an improvement in euro-area services output and German factory orders spurred demand for the region’s higher-yielding assets.
Italy’s 10-year yield dropped to the lowest in eight weeks, narrowing the spread versus German securities, as separate data showed the nation’s recession eased in the second quarter.
Greek bonds advanced for a fifth week.
German bunds declined as signs the euro area is recovering from a record-long recession damped demand for the region’s safest assets.
“There has been some improvement in data and the tone in peripherals has been fairly constructive,” said Peter Goves, a fixed-income strategist at Citigroup Inc in London.
Italy’s 10-year yield fell seven basis points, or 0.07 percentage point, this week to 4.19 percent at 5 p.m. in London on Friday, after reaching 4.17 percent, the lowest since June 10.
Similar-maturity Spanish yields dropped seven basis points to 4.50 percent after reaching 4.48 percent on Friday, the lowest since June 6.
An index of activity in the euro-area services industry based on a survey of purchasing managers rose to 49.8 in July from 48.3 a month earlier, Markit Economics said on August 5.
German factory orders increased 3.8 percent in June, a government report showed on August 6.
The rate on Greece’s bond due in February 2023 dropped 22 basis points this week to 9.72 percent. German 10-year bund yields increased three basis points to 1.68 percent.