Bonds round-up: Weak consumer confidence boosts US Treasuries

Date: Tuesday 23 Feb 2010

Poor consumer confidence figures have pushed US Treasury bonds sharply higher.

The Conference Board’s index fell more than expected. It dived 11 points to 46 from an upwardly revised 56.5 in January.

Investors are also looking to US bonds as a safe haven for their money as fears continue about Greece and other European countries. A former chief economist at the International Monetary Fund predicts that soaring public debt is likely to force several countries to default.

Two-year yields fell nearly six basis points at 0.83%, while ten-year yields were nearly seven basis points lower at 3.73%.

Elsewhere on the US economic front, home prices fell 2.5% during the final quarter of 2009, according to the S&P/Case-Shiller Home Price Index.

UK gilts are rising in price on the back of the Bank of England governor Mervyn King’s hint that the UK's quantitative easing programme may restart if the UK economy takes another downturn.

Two-year yields are five basis points lower at 1.06%, while ten-year yields are six basis points lower at 4.17%.

Last month’s terrible weather and an increase in the stamp duty threshold back to £175,000 have sent UK mortgage approvals to an eight month low. Just 35,083 home loans were agreed by lenders in January, down 23% on December’s 45,650 and the lowest since May, said the British Bankers' Association. But it was still up 38% on the same time last year and nearly double the all-time low hit in November 2008.

German bunds are also moving higher. Two-year yields are six basis points lower at 1.01% and ten-year yields are 10 basis points lower at 3.17%.

The Ifo business climate index fell to 95.2 in February from 95.8 in January, below forecasts of a rise.

« Go back to news channel

Email this article to a friend

or share it with one of these popular networks:

• DIGG
• FACEBOOK
• STUMBLEUPON
• MIXX
• YAHOO BUZZ
• DELICIOUS
• REDDIT
• NEWSVINE