European govt bonds higher in early London trade

European government bonds were up in early London trade following the release of a weaker-than-expected German business climate Ifo index for December, dealers said.

The West German business climate index fell for the 7th consecutive month to 87.1 in December from 87.3 in November, but was up from 85.9 in December last year. Economists polled by AFX News had forecast the index to rise to 87.5 in December.

Today's decline in the Ifo - which provide another evidence of the bleak economic outlook in Europe - boosted the European bond market, said Christoph Rieger, analyst at Commerzbank.