The 10-year German bonds posted their first weekly gain since early November

The 10-year German bonds posted their first weekly gain since early November as renewed concern about the indebted countries of the region demand driven by dams as a refuge.

The yield on the Bund, government security benchmark in Europe, fell from about seven months reached on 16 December. Portuguese bond denied that his rating was downgraded by Fitch Ratings, which also said it may cut Greece to non-investment grade. AAA rating in France was confirmed yesterday by Standard & Poor's with a stable outlook. Spanish bonds rose.

"The concerns about the periphery are still valid to enter the new year and that has been essential to support bonds," said Eric Vara, interest rate strategist at Lloyds Corporate Bank. "Without a dramatic surprise of the political leaders of the EU, I can not see the situation change."

The yield on the 10-year Bund ended the week to 2.98 percent from 3.03 percent on Dec. 17, while two-year yield fell to 0.96 percent from 1.06 percent. The Portuguese 10-year production rose to 6.84 percent from 6.68 percent, and the Irish equivalent yield gained 62 basis points to 9.22 percent. Spanish production of 10 years fell four basis points to 5.52 percent.

debt rating was downgraded one level Portugal yesterday by Fitch Ratings to A +, which said the economy faces a "deteriorating" prospects as the government struggles to contain the euro zone's fourth largest budget deficit. The outlook is negative. The rating may be cut one or two levels by Moody's Investors Service, the company said on 21 December.

Ratings Downgrades

Greece may have its credit rating cut to non-investment grade by Fitch Ratings within six weeks after a review of the nation "fiscal sustainability", the agency said Dec. 21. Moody's downgraded credit rating five levels of Ireland on 17 December and said that further reduction is possible for the government struggles to stem losses in the banking system in the country.

Fitch said in a separate report, the risk of the European Union will have to rescue other euro member states after rescue of Ireland and Greece.

"While the economic fundamentals of the euro area credit are stronger than current levels of risk assessment indicates, Fitch believes that the crisis is systemic to the extent that it reflects concerns about the viability of the euro, as well as country-specific vulnerabilities, "the ratings company said.

The euro will overcome the crisis in the region of deficit and support the international monetary system, Song Zhe, China's ambassador to the European Union, said yesterday.

Chinese Vice Premier Wang Qishan said on December 21 his country had taken "concrete steps" to help the European Union with their debt problems.

German bonds returned 6.1 percent this year compared with 5.4 percent for U.S. Treasuries. Ireland bonds gave investors a loss of 14 percent, bonds 20 percent Greek and Portuguese bonds 8.1 percent, the indexes show....