Prices on government bonds down in US, up in eurozone and UK

Prices on government bonds were down in the United States on Monday but were up in the eurozone and the UK, while the markets in Japan were closed for a national holiday.

In the eurozone, news of controlled inflation sent bond prices up and added to the likelihood that the European Central Bank will leave eurozone interest rates at their current level for the time being.

Yields on the 10-year Bund were down 3.3 basis points to 3.254 percent, while the 2-year Schatz lost 0.7 basis points to yield 2.203 percent.

In the UK, gilts followed eurozone prices up as investors waited for the scheduled release on Wednesday of the minutes of this month’s Bank of England monetary policy committee meeting.

Sentiment remains that UK interest rates are likely to be lowered in August.

In the US, yields on 2-year Treasury bonds gained 0.8 basis points to a yield of 3.876 percent, while 30-year yields were up 1.8 basis points to 4.412 percent as trade was slow while investors wait to hear what Federal Reserve Chairman Alan Greenspan has to say to Congress later in the week.

Yields rose on news that implies stronger growth in the US economy than had been expected, increasing the chances that interest rates will continue for the time being.

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