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Falling industrial production numbers raises prices on US treasury bonds


by Brian Turner
August 16, 2005
Falling industrial production numbers raises prices on US treasury bonds

Prices were up and yields were down on US Treasury bonds on Tuesday on falling industrial production numbers.

Production grew by only 0.1 percent in July and capacity utilization was down by 0.1 percent to 79.8 percent.

The 10-year Treasury bond was down to a yield of 4.211 percent at late morning, but had been as low as 4.207 percent, down by 8.2 basis points earlier in the day.

The 2-year bond fell 4.6 basis points to a yield of 4.025 percent.

Eurozone bonds gained in price and yields fell on the influence of US trends. The 2-year Schatz lost 3.9 basis points to yield 2.202 percent and the 10-year Bund fell by 5.2 basis points to 2.323 percent.

In the UK, gilt yields were down on reports of rising inflation, which was up to an annual rate of 2.3 percent in July, reducing the chances of another interest rate cut soon.

The 2-year gilt lost 0.7 basis points to yield 4.224 percent, while the 10-year gilt dropped 3.1 basis points to 4.294 percent.

In Japan, government bond prices were down and yields were up on rising equities markets and continuing sentiment concerning the Japanese economy, especially among foreign investors.

The 10-year government bond gained 1.5 basis points to 1.470 percent, while 20-year and 30-year bonds reached 9-month high yields.



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