ECONOMY

Italian bonds fall with Spain’s as Greek debt proposals awaited

Italian government bonds tumbled alongside Spanish securities as Germany said it’s yet to receive Greece’s proposals for economic reforms, which are crucial to unlocking financial aid to the Mediterranean nation.

The Greek proposals will have to be “quantifiable” in line with euro-area agreements, German Finance Ministry spokeswoman Marianne Kothe said. Bonds of lower-rated European countries also declined amid speculation — denied by the government — that Greek Finance Minister Yanis Varoufakis is about to resign. Two-year yields in Germany, the Netherlands and Finland fell to records as Mario Draghi said the European Central Bank will have no problem meeting its debt-purchase targets.

“Greece remains a key issue in the market,” said Felix Herrmann, a fixed-income analyst at DZ Bank AG in London. “Time is running out and little progress has been made. That uncertainty is weighing on peripheral bonds.”

Italy’s 10-year yield climbed two basis points, or 0.02 percentage point, to 1.33 percent as of 12:32 p.m. London time. The 2.50 percent bond maturing in 2024 dropped 0.185, or 1.85 euros per 1,000-euro ($1,085) face amount, to 110.615.

The rate on similar-maturity Spanish debt rose two basis points to 1.29 percent.

Draghi said in Rome on Thursday that policy makers “count on reaching” the target of purchasing 60 billion euros of debt a month via its quantitative-easing program that began March 9.

German two-year rates dropped to minus 0.256 percent, the lowest since Bloomberg began collecting the data in 1990. The rate on Finland’s two-year security fell to a record minus 0.206 percent, while the yield on similar-maturity Dutch notes slipped to an all-time low of minus 0.203 percent, before rebounding.

[Bloomberg]