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Bonds round-up: Markets quiet ahead of release of Fed minutes

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Date: Tuesday 08 Apr 2008

LONDON (ShareCast) - Bond prices have drifted today as the market adopts a wait-and-see attitude ahead of the release by the Federal Reserve later today of the minutes from the March 18 policy meeting .

Gilts have edged higher, as equity investors have been spooked by the latest housing data from mortgage lender Halifax.

House prices fell by 2.5% in March, the biggest monthly fall since September 1992 according to the latest survey from Halifax.

Economists had been predicting a fall of just 0.4%. The annual rate of house price inflation is now down to 1.1%. Prices in the first quarter of 2008 were 1.0% lower than in 2007 Quarter 4 and Halifax predicts there will be a "modest (low single digit) decline in UK house prices this year".

The yield on the 10-year gilt fell one basis point to 4.49%.

Gloomy housing data Stateside has less of an effect on sentiment, where US treasuries ease a little.

The National Association of Realtors index of signed purchase agreements fell 1.9% in February to 84.6, its lowest level since records began in 2001. The decline follows a revised 0.3% rise in January.

The yield on the 10-year treasury note moves up a tick to 3.54%.

European bonds were similarly dormant, with the yield on the 10-year bund edging one basis point higher to 4.02%.