NEW! Investment Companies Centre

Bonds round-up: Rate rise fears haunt bonds

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 29 May 2008

LONDON (ShareCast) - The possibility of interest rates rising soon pushed US treasuries sharply lower again with the benchmark 10-year note's yield hitting its highest level since December.

Selling began following the upward revision of US GDP growth for the first quarter from 0.6% to 0.9 with 10-year yields up 10 basis points to 4.1%. Two-year note’s fared even worse with yields up 15 basis points to 2.76%. The 10-year yield has risen by about 80 basis points since March as confidence in the US economy has picked up.

European government bonds also fell as broad money grew quicker than expected in April at 10.6% against an expected 10.3%. Two-year bund yields hit a nine month high. Rising equity prices also encouraged some switching out of bonds. Ten year bunds added 6 basis points to 4.41%.

In the UK, gilts also fell as the latest CBI distributive sales survey showed the balance of retailers increasing up prices was at an 18-year high.

The CBI survey also predicted sales could pick up in June casting doubt over how badly the UK consumer is suffering. It suggests no change in interest rates next time said economists. Ten-year gilt yields rose by over 7 basis points to 5.03%. Short yields increased by over 8 basis points to 5.12%.

Digital Look have been voted
"Best Research and Information Provider"

4th Floor, Bankside House, 107 Leadenhall Street, London EC3A 4AF.
Registered in England and Wales (registered no. 3678570).