Strong economic growth hits US treasuries

Date: Friday 29 Jan 2010

US treasuries fell back as strong fourth quarter GDP figures sapped demand for government debt, but bonds were higher in other markets.

The US economy grew at an annualised pace of 5.7% in the fourth quarter of 2009, ahead of expectations.

The rise in gross domestic product was also ahead of the 2.2% increase seen in the third quarter.

The yield on a 10-year treasury fell climbed by three basis points to 3.66%.

Worries over the state of Greece’s finances are continuing to dog mainland European bonds. We have no ‘plan B’ to help the beleaguered Mediterranean country, said EU monetary affairs commissioner Joaquin Almunia, explaining that there will be no bail-out.

The yield on Germany’s 10-year bund was unchanged at 3.2%.

Bonds were wanted in the UK, despite strong demand for equities.

The yield on a 10-year gilt fell by three basis points to 3.91%.

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