Finance Markets

April 18, 2006

UK, Eurozone bond prices up

Filed under: Bonds, Economy, Europe, UK

Prices on government bonds in the Eurozone and the UK were up and yields fell on Tuesday. Investors worried about how rising oil prices will affect growth of the world economy as US crude prices hit new record highs. European bonds also benefited from Monday’s higher prices on US Treasury bonds. Trade was limited somewhat, however, as traders waited for the release of the minutes from the most recent meeting of the US Federal Reserve, hoping that there will be some clue as to what the Fed intends to do about interest rates in the next few months.

At late morning, yields on the two-year Schatz had fallen 1.1 basis points to 3.307 percent. The ten-year Bund dropped 2.7 basis points to a yield of 3.924 percent.

In the UK, new data on house prices from the Royal Institution of Chartered Surveyors helped gilt prices. The monthly index dropped to +13 in March, from a revised figure of +16 in February.

Two-year gilt yields were down 1.2 basis points to 4.516 percent, while ten-year gilt yields were down 1.3 basis points to 4.513 percent.

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