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Tuesday 02nd of December 2008
December 4, 2006

Eurozone bonds mixed ahead of ECB meeting


by Elaine Frei

Yields on US Treasury bonds were up at midday in New York, trying to recover from last week when yields fell to near their lowest point this year. Yields were already so low, some analysts felt, that investors barely paid attention to new data from the National Association of Realtors that showed pending home sales were down 1.7 percent in October. The two-year Treasury bond was 0.8 basis points higher at noon on Monday, to a yield of 4.537 percent, while the ten-year bond had added 0.2 basis points to 4.440 percent.

In Europe, yields were mixed as some investors took profits and anticipated a meeting later in the week by the European Central Bank, when the Bank is expected by many to raise Eurozone interest rates to 3.5 percent. The two-year Schatz saw yields drop by 1.2 basis points to 3.601 percent, but the ten-year Bund added 0.7 basis points to a yield of 3.669 percent.

Yields on UK gilts, meanwhile, were lower ahead of a Bank of England meeting this week, at which the Bank is expected to keep interest rates at 5 percent. The two-year gilt was 2.3 basis points lower to 4.903 percent, while ten-year gilts were yielding 4.467 percent, a decline of 0.5 basis points.

In Japan, the ten-year Japanese government bond yielded 1.615 percent, a gain of 0.5 basis points ahead of an auction of ¥1,900 billion in ten-year bonds.

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Story link: Eurozone bonds mixed ahead of ECB meeting


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