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Bonds round-up: Bonds remain steady

Date: Tuesday 02 Feb 2010

Bonds round-up: Bonds remain steady

US Treasury bonds are steady ahead of US job creation figures on Friday.

The figures are expected to show that more jobs were created in January than in any other month for the past two years. A figure of 8,000 extra jobs is expected by economists.

The US will announce tomorrow how much it will be raising in its latest bond auctions.

Most US bonds are slightly higher with two-year yields falling one basis point to 0.84% and ten-year yields slightly less than one basis point lower at 3.64%.

It is a mixed day for UK gilts even though news concerning the construction sector was relatively positive. Shorter-dated gilts are rising in price with two-year yields nearly two basis points lower. In contrast, longer-dated gilts are falling in price. Ten-year yields are one basis point higher at 3.91%.

Britain’s construction sector continued to shrink in January, although at its slowest pace in 23 months.

The CIPS/Markit construction Purchasing Managers Index (PMI) increased to 48.6 last month from 47.1 in December, better than the read of 47 predicted by economists. A number over 50 indicates growth and below that contraction.

German bunds are barely changed with little pattern in the price movements. Two-year and ten-year yields are barely changed at 1.12% and 3.19% respectively.

Eurozone producer prices rose by just 0.1% month-on-month in December.

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