Greek 10-year bonds rose, snapping an eight-day decline, after the government said it will ask for a €45 billion rescue package from the European Union and the International Monetary Fund.
The advance pushed the yield on the 2020 bond down from the highest level since at least 1998, according to Bloomberg generic prices. Prime minister George Papandreou said he gave the Finance Ministry a mandate to ask the European Union today to release the aid. The cost of insuring against a default on Greek bonds fell.
"We are seeing Greek bonds rally in case Greece triggers the aid package today," said Nick Stamenkovic, a fixed-income strategist in Edinburgh at RIA Capital Markets, a broker for banks and investors. "The Greek authorities seem to have realised the gravity of the situation and are moving closer to a request for financial aid."
Greek 10-year yields slid to 8.58 per cent, with the spread at 551 basis points.
The European Commission said it didn't know when the package would be activated and the interest rate on the loans still hasn't been calculated.
German bonds earlier fell for the first day in three as a report showed the nation's business confidence rose to a two-year high in April and European industrial orders climbed in February.
Two-year note yields jumped 5 basis points to 0.91 per cent, while 10-year yields rose 3 basis points to 3.08 percent.
The Ifo institute said its business climate index, based on a survey of 7,000 executives in Germany, climbed to 101.6, from 98.2 in March, the highest reading since May 2008. Orders to industrial companies in the 16-nation euro area increased 1 per cent from January, according to the EU statistics office in Luxembourg.
Bloomberg