Bond markets gain as investors await US data

| July 11, 2005 | 0 Comments
Bond markets gain as investors await US data

By late morning in New York on Monday, 10-year US Treasury bonds had advanced by 5.1 basis points to a yield of 4.146 percent, after an early sell-off that had yields up to 4.154 percent.

Investors are anticipating a number of reports due to be released this week, including consumer and producer inflation data, retail sales figures, as well as the University of Michigan’s consumer confidence survey.

Treasury announced an auction of $13 billion in five-year bonds, down from an availability of $14 billion in the last sale of five-year paper.

Also announced was a sale of $9 billion in new 10-year inflation-protected securities, or Tips.

These announcements were seen as reflecting the possibility of a lower deficit than had been predicted.

In the eurozone, the 2-year Schatz rose 4.9 basis points to yield 2.187 percent, while the 10-year Bund rose 4.1 basis points to yield 3.226 percent.

Good economic news out of France further reduced the possibility of eurozone interest rate cuts in the near future.

In the UK, the 2-year gilt gained 5.9 basis points to yield 4.101 percent and the 10-year gilt was up 7.1 basis points to a yield of 4.291 percent.

Prices on gilts fell as the stock markets were up and investors backed off from their search for safe investments after Thursday’s bombings in London.

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