Bonds fall across the markets

Date: Wednesday 03 Mar 2010

Bonds were lower across the markets amid general optimism.

US treasuries fell back amid cheery economic data.

US private employers shed 20,000 jobs in February, down from 60,000 in January and in line with analysts’ estimates. It was the smallest decline in two years, according to payroll processor ADP.

Data from the services sector, which dominates the US economy, was better than expected. The Institute for Supply Management’s index of non-manufacturing businesses climbed to 53 in February from 50.5 the previous month. A reading above 50 indicates expansion.

The yield on the 10-year US treasury climbed by three basis points to 3.64%.

Sentiment in the UK was also lifted by strong service sector data, sapping demand for government debt.

A survey by the Chartered Institute of Purchasing and Supply (CIPS) and the information group Markit found the purchasing managers’ index rose to 58.4 from 54.5 in January. The figure for February was ahead of expectations and is the highest reading since January 2007.

The yield on a 10-year gilt was up one point at 4.03%.

Mainland European bonds were also lower as stocks climbed.

The yield on Germany’s 10-year bund was up three basis points at 3.14%.

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