European Bonds Gain on View ECB Rate Increases Will Quell Inflation

(Bloomberg) -- European government bonds rose after
comments by European Central Bank President Jean-Claude Trichet
failed to suggest the bank would need to raise interest rates
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
bank had kept its inflation forecast for 2008 unchanged. Trichet
left the door open for more interest rates increases this year
after the ECB lifted its refinancing rate a quarter point to 4
percent.


Read more at Bloomberg Bonds News