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Bonds mirror lacklustre equities

Date: Monday 25 Jan 2010

The bond markets mirrored equities Monday with little in the way of movement.

News of renewed confidence in the housing market failed to lift UK gilts.

The latest survey from online estate agent Rightmove showed the number of respondents expecting a rise in prices this year was 53% compared to just 10% this time last year.

But gilts were similarly lacklustre to the equity markets, with the yield on a 10-year gilt falling by just one basis point to 3.91%.

In the US, all eyes were on this week’s vote on whether to reappoint Ben Bernanke. Statements from senators so far suggest that he will win re-election.

The yield on a 10-year note was one basis point higher at 3.62%.

European bonds were flat ahead of a closely-watched Greek bond auction.

In European economic news, growth in eurozone industrial new orders for November was revised up sharply to 2.7%, due to a correction in the German data. The figure was revised from a previously reported 1.6% following an upwards revision in foreign orders for German capital goods.

But German consumer sentiment is likely to fall in February amid fears of rising unemployment, the GfK market research group said. The overall indicator is forecasting a value of 3.2 points for February 2010, following a revised value of 3.4 points in January.

Germany’s 10-year bund was flat after the mixed economic news, with the yield unchanged at 3.22%.

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