Spanish and Italian bonds rally amid speculation ECB will buy securities

Spanish and Italian government bonds rallied, paring a slump for the week, on speculation the ECB will buy the securities to help prevent the eurozone from disintegrating.

German, US and British yields fell to all-time lows earlier after Spanish economy minister Luis de Guindos said the future of the euro is at stake and a report showed US employers added the smallest number of workers in a year in May. .

“The markets are so jumpy that even the slightest rumour of policy action would ensure profit-taking on short Spanish government bond positions,” said John Davies, a strategist at WestLB AG in London, referring to bets that prices will decline.