Bonds: Gilts outperform

Alexander Bueso WebFG News | 27 Nov, 2017 19:28 - Updated: 19:10 | | |

libra 630 inglaterra uk pound

These were the movements in some of the most widely-followed 10-year sovereign bond yields:

US: 2.34% (+2bp)
UK: 1.25% (+0bp)
Germany: 0.36% (+1bp)
France: 0.70% (+2bp)
Spain: 1.49% (+2bp)
Italy: 1.81% (+3bp)
Portugal: 1.94% (+1bp)
Greece: 5.38% (+0bp)
Japan: 0.03% (+0bp)

Gilts outperformed at the end of the week amid the release of mixed data overseas and slight gains in Sterling.

Across the Channel, the focus was on remarks from top SPD officials in Germany signaling that they were open to negotiations with Chancellor Angela Merkel on creating a stable government.

In terms of economic data, another strong reading on the IFO Institute's German business confidence index underlined the robust expansion underway in the single currency bloc's largest economy.

The headline IFO index hit a fresh record high of 117.5 (consensus: 116.5), entirely on the back of improved expectations, up from a reading of 116.8 for the month of October.

"The German economy is on track for a boom. The latest figures indicate economic growth of 0.7 percent in the fourth quarter, pointing to growth of 2.3 percent for 2017 as a whole," IFO president Clemens Fuest said in a statement.

Over in the States, Treasuries fell back amid thin trading conditions despite a weaker than expected reading on factory sector conditions.

IHS Markit's manufacturing sector purchasing managers' index fell back from a reading of 54.6 for October to 54.3 in November (consensus: 55.0) - a two-month low.

Further afield, Standard&Poor's lowered its rating on South Africa's local currency sovereign debt by one notch to BB+, meaning they were no longer considered 'investment grade' by that agency.

Moody's on the other hand kept its rating on the country's long-term debt at Baa3, its lowest investment grade rating but placed them on review for a possible downgrade.

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