Bonds: Yields rising in Euro danger countries

Date: Thursday 22 Dec 2011

International bond markets appeared to be avoiding risk through Thursday, despite positive data from the US, as both Italian and Spanish bond yields rose.

It had been hoped that the start of a new three-year loan facility for euro-area banks might calm markets but so far there is no evidence of this

These were the movements on the yields on benchmark 10-year bonds amongst some of the most watched sovereigns:

Italy 6.855% (+17.5bp)
Spain 5.365% (+9bp)
France 3.072% (+5.3bp)
Germany 1.94% (+1bp)
UK 2.05% (-2.3bp)
US 1.95% (-1.2bp)

The main news for investors was strong US unemployment data showing claims fell by 4000 last week to 364,000, this came against consensus forecasts of a rise to 380,000.

UK GDP growth for the third quarter was revised upwards from 0.5% to 0.6%.

In Spain, which is one of the countries most imperilled by the European debt crisis, the country’s new Prime Minister Mariano Rajoy appointed a former Lehmans banker and an academic to budget setting roles within the government. They will replace the economy, competition and public administration posts left vacant by the departure of Elena Salgado.

BS

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