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Bonds round-up: Mixed day for Treasuries

Date: Monday 08 Mar 2010

Bonds round-up: Mixed day for Treasuries

US Treasury bonds are barely changed at the short-dated end, while longer-dated bonds are falling in price.

Two-year yields are less than one basis point higher at 0.9% and ten-year yields three basis points higher at 3.71%.

Investors are switching out of municipal bonds into US Treasury bonds because of the worsening US state and local government finances.

Zhou Xiaochuan, the governor of the People’s Bank of China, has hinted that China could abandon the yuan's unofficial peg to the dollar.

Zhou has described the dollar peg, in place since mid-2008, as a “temporary” response to the global financial crisis.

Richard Lambert, director general of business lobby group, the CBI, has written to Alistair Darling, calling on the chancellor to balance public finances by 2015-16, two years earlier than planned

UK gilt prices are in decline with two-year yields one basis point higher at 1.32% and ten-year yields nearly four basis points ahead at 4.1%.

The head of the International Monetary Fund says that Greece's financial woes are unlikely to spread to other eurozone countries with high debt levels.

Dominic Strauss-Kahn said “there's no reason” to expect that Spain and Portugal would need external support. Strauss-Kahn’s also remains confident that European leaders can resolve the crisis without a bailout by the IMF.

His comments came just after French president Nicolas Sarkozy said the eurozone will stand by Greece should it need financial help. The eurozone stands side by side with Greece because "that's what partners are for," Sarkozy said.

Shorter-dated German bunds are rising in price with two-year yields less than one basis point lower at 0.99%. Longer-dated bunds are falling with ten-year yields one basis point higher at 3.17%.

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