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Bonds round-up: Bonds rally slightly

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Date: Friday 06 Jun 2008

LONDON (ShareCast) - Bonds rallied after a tough week on fears that inflation concerns could prompt interest rates to rise again.

US Treasuries have been hard hit but picked up as monthly jobs data showed a decline of 49,000, after a 28,000 drop in April. The jobless rate increased to 5.5% from 5%, the biggest jump since February 1986. The yield on the Treasury 10-year note dropped 6 basis points to 3.98%.

European bonds also improved despite ECB president Jean-Claude Trichet's comment yesterday that eurozone rates may go up next month to head off rising inflation fears. The yield on the 10-year bund fell 6 basis points today to 4.41% though short yields were still reacting to Trichet's remarks and added 2 basis points.

Gilts rose, but less than other bonds. The yield on the ten year benchmark gilt is down 3 basis points to 5.01%.

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