European Bonds Snap Three Weeks of Gains After ECB Indicates Higher Rates

(Bloomberg) -- European government bonds snapped
three weeks of gains after the European Central Bank indicated
it will raise interest rates further this year.

ECB President Jean-Claude Trichet signaled rates may rise
from a six-year high of 4 percent as early as September, saying
``strong vigilance'' is needed to guard against price pressures.
Policy makers used the phrase a month before each of the ECB's
eight rate increases since late 2005. Trichet spoke on Aug. 2
after the bank kept borrowing costs unchanged, as forecast.


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European Bonds Advance as Subprime Woes Send Corporate Debt Risk Soaring

(Bloomberg) -- European government bonds gained for
a fifth day as the risk of owning corporate debt soared to the
highest in at least three years.

Bunds rose, pushing 10-year yields to the lowest in 2 1/2
months, after Germany's IKB Deutsche Industriebank AG reported
losses linked to loans made to U.S. homeowners with poor credit
histories. Government debt dropped earlier on speculation the
European Central Bank will this week reiterate its preference for
higher rates.


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European Bonds May Fall as Inflation Report Points to Interest-Rate Rise

(Bloomberg) -- European government bonds may decline
on speculation a report today will show inflation held near the
European Central Bank's target last month, boosting the case for
higher interest rates.

The European Union will probably say consumer prices in the
13-nation euro region increased 1.9 percent in June from a year
earlier, the same as in May, according to economists in a
Bloomberg survey. ECB policy makers last week said benchmark
borrowing costs remain supportive of economic growth.


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European Government Bonds Drop on Concern Global Inflation Is Quickening

(Bloomberg) -- European government bonds fell for a
second day as central banks in the U.K. and Sweden indicated they
will raise interest rates further, adding to concern global
inflation is quickening.

Debt's slide sent 10-year yields to near a five-year high as
investors reassess the outlook for global borrowing costs.
Interest-rate futures suggest the European Central Bank will keep
raising lending rates this year, while Sweden's Riksbank said
yesterday it'll lift rates twice more and minutes of the Bank of
England's last rate-setting meeting showed more policy makers
backed higher borrowing costs than forecast.


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European Government Bonds Gain; German Sentiment Index Unexpectedly Drops

(Bloomberg) -- European government bonds rose after
a report showed investor confidence in Germany, the continent's
biggest economy, unexpectedly fell this month.

Two-year yields fell from near a six-year high after the ZEW
Center for European Economic Research said its index of investor
and analyst expectations dropped to 20.3, from 24 in May.
Economists surveyed by Bloomberg News had expected confidence to
improve, predicting a reading of 29.


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European Government Bonds Little Changed Before German Confidence Report

(Bloomberg) -- European government bonds were little
changed before a report that's expected to show investor
confidence in Germany, the region's largest economy, soared to
the highest in a year.

Ten-year yields held near the strongest since August 2002
yesterday as European Central Bank official Jose Manuel Gonzalez-
Paramo said monetary policy was still accommodative. Bonds may
extend losses before a June 22 report that's likely to show
German business sentiment stayed near a record high this month.


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European Government Bonds May Fall on Speculation Inflation Is Quickening

(Bloomberg) -- European government bonds may fall
before a report likely to show inflation in the euro region held
near the European Central Bank's 2 percent limit last month,
fueling expectations of further interest-rate increases.

Benchmark 10-year bund yields touched the highest since
August 2002 yesterday after ECB policy maker Erkki Liikanen said
the outlook for growth in Europe will be ``positive'' for years.
Futures trading shows investors are raising bets the central bank
will lift rates twice more this year.


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European Bonds Gain on Central Bank President's Interest Rate Remarks

(Bloomberg) -- European government bonds rose after
central bank President Jean-Claude Trichet failed to suggest
interest rates would need to rise beyond this year to rein in
inflation.

Yields on benchmark 10-year bunds, more sensitive to the
inflation outlook, fell from a three-year high after he said the
European Central Bank kept its inflation forecast for 2008
unchanged. Trichet left the door open for more interest-rate
increases this year after the ECB lifted its refinancing rate a
quarter-point to 4 percent.


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European Government Bonds May Fall on Expectation ECB to Keep Raising Rate

(Bloomberg) -- European government bonds may decline
on speculation the European Central Bank will this week signal it
is willing to raise interest rates further.

Benchmark two-year notes last month fell by the most since
March 2006, sending yields to six-year highs, on concern the ECB
needs to do more to keep inflation from quickening as growth in
the euro region economy proves to be faster than expected. A
report today may show expansion in European service industries
picked up in May, adding to the case for higher rates.


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