UK 50-year gilt to open on bond markets

The UK saw mixed yields in short-dated gilts but firmly lower yields on longer-dated issues on Tuesday after it was announced that a new 50-year gilt would be sold next week for the first time since 1960. The 2-year gilt was up 1.6 basis points to yield 4.354 percent, while the 10-year gilt was yielding 4.32 percent, down 2.8 basis points.

In the eurozone, prices and yields were mixed as well as investors waited for today’s auction by Germany of €8 billion in new 10-year bonds. The yield on the 2-year Schatz rose 1 basis point to 2.233 percent, but the 10-year Bund fell 0.6 basis points to yield 3.3 percent.

Meanwhile, a dip in US industrial production figures in April furthered concerns about growth possibly continuing to lag past the first quarter. This caused the prices of US Treasury bonds to rise and yields to fall on Tuesday. Data showing more housing starts and a higher-than-expected producer price index in April, on the other hand, seemed not to effect prices and yields while investors looking for safe places to put their money also helped keep bond prices up.

In late-morning transactions on Tuesday in New York, 2-year Treasury yields were down 2.5 basis points to 3.56 percent. Ten-year bond yields were 3.5 basis points lower at 4.10 percent, while 30-year bonds were yielding 4.46 percent, a loss of nearly 4 basis points.

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