Declines continue on treasury bonds

US Treasury bonds had lost 1.3 basis points by mid-day in New York, to yield 4.098 percent.

The decline in yields came on the news that the Philadelphia Federal Reserve’s index of activity within its district has fallen to - 2.2 in June, well under the 7.3 in reached in May and even further below the 10.0 level that was expected for June.

Yields on government bonds in the eurozone fell as well, as the 10-year Bund lost 2.8 basis points to 3.995 percent. Demand for new auctions have been mixed, but interest in Thursday’s auction of €844 million in Spanish 30-year bonds was good.

Meanwhile, in the UK the 10-year gilt was yielding 4.395 percent. Figures that showed growth in retail sales falling to its lowest point in six years didn’t seem to have much effect on trading.

In Japan, 10-year government bonds gained 5 basis points to reach a yield of 1.290 percent on profit-taking and on better-than-expected figures for Japanese machinery orders.

Those numbers were taken by investors as a sign that the economy was continuing to recover. Opinions are split on whether yields on Japanese government bonds will continue to rise.

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