Bonds edge higher

Date: Monday 18 Jan 2010

Gilts were little changed Monday amid buoyancy in the equity markets and broadly encouraging economic news.

Company news was thin on the ground, but mergers and acquisitions speculation relating to energy company International Power and Cadbury lifted the FTSE 100.

In economic news, property website Rightmove’s house price index climbed by 0.4% during January, taking the average house price to £222,261. Prices had fallen by 2.2% in December.

The yield on a 10-year gilt rose fell by two basis points to 3.92%, its lowest level in a month.

Gilt markets tomorrow will be focused on inflation data, expected to show rising prices in December.

Bonds were also higher in mainland Europe, with attention focused on the dire state of Greece’s finances, which EU government officials are discussing in Brussels today.

The yield on Germany’s 10-year bund fell by two basis points to 3.24%.

US markets are closed for Martin Luther King day.

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