Finance Markets

November 9, 2006

US Treasuries mixed on mixed data

Permalink: US Treasuries mixed on mixed data

Filed under: Bonds, Economy, US, Europe, UK, Japan

Prices and yields on US Treasury bonds were mixed on Thursday on data that was equally mixed. The trade deficit narrowed less than had been expected in September. On the other hand, consumer confidence was lower in the US, with the University of Michigan’s consumer confidence index down to 92.3 when a figure of 93.6 had been expected. In addition import prices were lower and unemployment claims were also down. Another factor in the day’s moves was relatively low interest in an auction of three-year paper on Wednesday; however, analysts were still optimistic for an upcoming auction of ten-year bonds.

At midday in New York, yields on the ten-year Treasury bond had dropped 0.2 basis points to 4.635 percent, but two-year yields were up b y 0.7 basis points to 4.756 percent.

In Europe, prices for longer-dated government bonds were higher but shorter-dated bonds held steady on the expectation that the European Central Bank will issue another interest rate hike in December. The two-year Schatz sat at a yield of 3.731 percent, while the ten-year Bund dropped 0.7 basis points to a yield of 3.740 percent.

Gilt prices in the UK were higher after the Bank of England’s Monetary Policy Committee raised interest rates, as had been expected. The two-year gilt fell 1.6 basis points to yield 5.073 percent, while the ten-year gilt dropped 2.9 basis points to 4.544 percent.

In Japan, the ten-year JGB dropped 2 basis points to a yield of 1.7 percent ahead of new gross domestic product date, to be released next week.

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