Finance Markets

August 15, 2005

Eurozone bonds see lower yields on slow trading

Filed under: Bonds, US, Europe, UK
Eurozone bonds see lower yields on slow trading

Prices were higher and yields lower on eurozone government bonds on Monday as trade was slow while equities markets in several countries were closed for holidays.

Oil prices were a factor, as recent record high prices spurred concerns about economic growth. The 2-year Schatz fell by 1.7 basis points to yield 2.236 percent and the 10-year Bund lost 0.5 basis points to a yield of 3.279 percent.

UK government bonds followed their European counterparts as data was released showing retail sales in central London down in July after the terrorist attacks there early in the month. The 2-year gilt lost 0.7 basis points to yield 4.224 percent, while the 10-year gilt was down by 1.1 percent to yield 4.324 percent.

In the United States, however, prices were down and yields up on data that shows regional economic activity higher than expected even though the Empire State index of manufacturing activity fell a bit from a July figure of 23.9 to 23.0 in August. Analysts had expected the decline to be more than that.

In addition, Treasury Department figures showed that foreign buyers purchased $71 billion worth of US assets in June compared with having bought only $56 billion in May.

Yields on both 2-year and 30-year Treasury bonds were up by 2.5 basis points, while the 10-year Treasury bond gained 3.1 basis points to yield 4.279 percent.

In Japan, the 10-year government bond gained 2 basis points to a yield of 1.455 percent.

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