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Tuesday 02nd of December 2008
December 6, 2006

Yields higher on US Treasury bonds


by Elaine Frei

Prices were down and yields higher on US Treasury bonds on new data showing that job growth in the private sector was better than expected in November. While reports from ADP Employer Services are not always an accurate gauge of non-farm payrolls, their report of 158,000 new jobs in the private sector, substantially higher than the 110,000 rise in non-farm new jobs expected when the Labor Department reports on Friday caught the attention of investors.

At midday in New York on Wednesday, two-year Treasury bonds were 5 basis points higher to a yield of 4,570 percent, while ten-year issues had added 2.9 basis points to 4.475 percent.

In the UK, gilts were mixed ahead of a new interest rate decision by the Bank of England, due Thursday. Investors didn’t pay as much attention to a report from the UK Treasury that reduced the expected issuance of new gilts in the fiscal year that ends next April by around £500 million. While two-year gilts were 1.3 basis points lower to 4.924 percent, ten-year gilts added 1.3 basis points to a yield of 4.506 percent.

Yields on Eurozone bonds were up ahead of an expected hike in interest rates by the European Central Bank on Thursday. The two-year Schatz was 2.6 basis points higher to 3.663 percent, while the ten-year Bund gained 1.9 basis points to 3.688 percent.

In Japan, the two-year Japanese government bond added 3 basis points to a yield of 0.840 percent, while five year-yields also gained 3 basis points to 1.230 percent. The ten-year JGB held steady at 1.650 percent.

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