* Bunds fall as concerns over military attack against Syria
* Global stock markets also supported by Chinese data
* Ten-year Spanish/Italian yield spread at zero
By Ana Nicolaci da Costa
LONDON, Sept 10 High-rated euro zone debt fell
on Tuesday as receding concerns of imminent military action
against Syria and upbeat Chinese data supported global stock
markets at the expense of safe-haven assets.
Ten-year German bond yields rose to 2 percent, as did those
on other low-risk euro zone bonds, including French, Dutch,
Belgian and Austrian.
U.S. President Barack Obama said on Monday he saw a possible
breakthrough in the crisis with Syria after Russia proposed that
its ally could hand over chemical weapons for destruction,
offering a path that averts planned U.S. military strikes.
"At least what this means is that there could be further
delays and even no military action at all. That scenario is at
least opening up," Elwin de Groot, senior market economist at
German Bund futures fell 52 ticks to 137.10,
pushing 10-year yields 4.7 basis points higher to
They have risen more than 80 basis points since this year's
lows and hit a 1-1/2 year high of 2.059 percent on Friday.
The fall in German Bunds came as global stock markets were
also underpinned by data showing China's industrial output
growth and retail sales were better than expected in August.
"We had fairly decent numbers out of China this morning ...
that seems to suggest the Chinese economy is bottoming out or
maybe gaining a little bit of momentum there," de Groot said.
Equivalent French yields were 4.6 basis points
higher at 2.60 percent, also after data showed an unexpected
drop in French industrial output in July.
In the periphery, Italian bonds continued to struggle with
growing political tensions. Ten-year Italian yields
were 1.5 bps higher at 4.54 percent.
A close ally of Silvio Berlusconi warned on Monday that his
party could pull out of Prime Minister Enrico Letta's government
if a Senate committee refuses to delay a decision on whether to
expel the media mogul from parliament.
The cross-party committee, held its first meeting on Monday
and must vote on whether Berlusconi can remain a lawmaker after
being convicted last month of tax fraud.
The premium offered by 10-year Spanish bonds over their
Italian counterparts reached parity.