Bonds: Moderate gains in yields following minutes
The following were the yield and basis point (bp) movements of some of the most-watched 10-year bonds this afternoon:
US: 2.43% (+3bp)
UK: 2.42% (+2bp)
Germany: 0.99% (-1bp)
France: 1.38% (-1bp)
Spain: 2.40% (-2bp)
Italy: 2.60% (+0bp)
Japan: 0.52% (+2bp)
Portugal: 3.31% (-10p)
Greece: 5.78% (-10bp)
Sovereign bond yields ended the day slightly lower with the exception of the US and the UK following the release of more hawkish than expected minutes in both of those jurisdictions and ahead of the release of a spate of manufacturing surveys worldwide, on Thursday morning.
In general the latest set of Fed minutes appear to have retained a fairly 'dovish' bias, stating that "many participants [also saw] a larger gap between current labour market conditions and those consistent with their assessments of normal levels of labour utilization."
However, many on the rate setting Committee were also of the belief that if it becomes apparent that their targets will be met sooner than expected then removing monetary policy accommodation should be done "sooner than they currently anticipated".
Meanwhile, and in the Eurozone, French Prime Minister Francois Hollande reportedly again railed against an excessively strong exchange rate.
To take note of, long-term Portuguese bond yields were once again sharply lower.
More interestingly, in the UK the minutes of the most recent meeting of the Monetary Policy Committee revealed that two of its members had in fact voted in favour of a hike in Bank rate, when none had been expected.
In parallel, mortgage lending in the UK reached £19.1bn in July, the highest since 2008, according to CML data.
AB