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July 13, 2005

US Treasury bonds fall as investors wait on inventory figures

Permalink: US Treasury bonds fall as investors wait on inventory figures
by Brian Turner

US Treasury bonds fall as investors wait on inventory figures

Prices for US Treasury bonds fell on Wednesday on news of a smaller trade deficit in May.

Investors are waiting to see retail sales and inventories figures that will be released later in the week, as well as Office of Management and Budget deficit forecasts for the fiscal year ending in September, which are expected to be lower than earlier thought.

The 5-year Treasury bond gained 1.1 basis points to a yield of 3.956 percent ahead of a new auction of $13 billion in 5-year notes, while the 10-year bond gained 0.8 basis points to yield 4.158 percent.

Bond prices were down in the eurozone as well, but rose in the UK on news that unemployment was up, further raising the likelihood of an interest rate cut by the Bank of England in August.

In the UK, the 2-year gilt lost 3 basis points to yield 4.080 percent, while the 10-year gilt lost 0.3 basis points to 4.317 percent.

In the eurozone the 2-year Schatz gained 2.2 basis points to yield 2.204 percent and the 10-year Bund was yielding 3.250 percent, a gain of 1.3 basis points.

Prices suffered in the eurozone before a €5 billion reopening sale in Germany.

Prices on government bonds in Japan fell and yields rose as the Bank of Japan issued an assessment of core economic strength that was slightly higher than previously.

The 10-year bond gained 2 basis points to yield 1.255 percent.



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