Sponsored by Digital Look Events

Bonds round-up: Bonds fall as Philly Fed improves

News for Spread Betters

PreviousPrevious
NextNext

There's a new Investor Edition of CMC Markets' spread betting platform... and it's exclusive to DigitalLook.com users...

Get full details about Marketmaker:Investor Edition here. Advertisement

Date: Thursday 20 Mar 2008

LONDON (ShareCast) - Yields on US bonds rose except for the very short end, with the spread between two- and 10-year notes narrowing for the fourth day in a row.

Two-year treasury note yields rose 8 basis points to 1.54% while 10-year note yields rose 1 basis points to 3.34%. The difference in yields narrowed to 180 basis points. News that the Philadelphia Fed's general economic index rose improved to minus 17.4 from minus 24 in February, better than expected, also sparked some selling.

European government bonds also fell dafter ECB Vice President Lucas Papademos said there were signs of robust credit growth in Europe and cooling some of the talk of more interest rate cuts this year. Producer-price inflation in Germany also increased at the fastest pace in more than a year.

Two-year bund yields rose by 8 basis points to 3.29%, while 10-year bunds added 2 basis points to 3.77%.

In the UK, two gilt yields rose by 6 basis points to 3.78%, while ten-year gilt yields fell 2 basis points to 4.29%.

Latest retail sales figures suggest the gloomy financial headlines have yet to have a real impact on shoppers' habits with volumes unexpectedly rising in February.

According to the Office of National Statistics, total sales volume increased by 1.0% between January and February. Sales volume for predominantly food stores increased by 1.6%, the largest increase for this sector since June 2006 (1.9%). Sales volume for predominantly non-food stores increased by 0.5%.

Analysts had been expecting sales to fall in February, but food sales through supermarkets remained strong.