European Government Bonds May Drop on Economic Growth, ECB Rate Prospects

(Bloomberg) -- European government bonds may extend
declines on speculation strength in the 13-nation economy will
prompt the European Central Bank to raise interest rates further.

Benchmark two-year yields last week held near a five-year
high, falling for a third week, as investors added to bets the
European Central Bank will lift interest rates at least twice
more this year. The ECB earlier this month signaled it will raise
rates in June. Executive Board member Lorenzo Bini Smaghi said
May 24 low inflation is the ``best contribution'' central banks
can make to the economy.


Read more at Bloomberg Bonds News