Sponsored by Digital Look Events

Bonds round-up: Demand strong at gilts auction

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 03 Apr 2008

LONDON (ShareCast) - The UK sold a record amount of two-year bonds at auction today, with the £3.76bn issue attracting bids covering 2.63 times the amount on offer.

The notes were sold with a coupon of 4.015%, compared to the current yield on the benchmark two-year gilt of 3.97% - down two ticks on the day, after sliding to 3.90% at one stage.

At the longer end of the market, gilts fell back, pushing the yield on the 10-year gilt up 2 basis points to 4.45%.

US treasuries reversed their recent downward trend as weak economic data sent investors scurrying for the safety of government debt.

First-time jobless claims rose by 38.000 to 407,000 in the week to 29 March, a level not seen since the immediate aftermath of Hurricane Katrina.

Meanwhile, the Institute for Supply Management’s non-manufacturing index came in 49.6 in March. Though this was up from February 49.3, a reading below 50 still indicates a contraction.

The yield on the 10-year treasury note eased 3 basis points to 3.56%.

European government bonds also rose, albeit tentatively, after European Central Bank policy-maker Klaus Liebscher predicted that inflation in the euro zone will ease towards the end of the year, raising hopes that the central bank may drop its hard-line stance and cut interest rates at some point in 2008.

Demand was also boosted by retail sales data for the euro zone which showed a 0.5% slide in February, when economists had been expecting a small rise.

The yield on the 10-year bund fell one basis point to 3.98%.