Bond yields down on economy fears

Bond prices were generally up and yields down on Tuesday in Europe, the United States, and in Japan.

In the UK, the 2-year gilt lost 2.2 basis points to yield 4.346 percent, and the 10-year gilt stood at a yield of 4.326 percent, down 3 basis points. Meanwhile, a sale of £4.25 million in index-linked bonds did well.

Yields on eurozone bonds also fell under the influence of a survey that showed a 6-month low in German investor confidence. The 2-year Schatz was yielding 2.203 percent, down 4 basis points, while the yield on the 10-year Bund fell 0.8 basis points to 3.3 percent.

In Japan, the 10-year government bond was down 3.5 basis points to close at a yield of 1.255 percent. This was its lowest level in over two weeks.

Meanwhile, prices of US Treasury bonds rose and yields fell close to three-months lows as investors worried about economic weakness in Europe.

2-year bonds fell 2.5 basis points to a yield of 3.599 in late trading. 10-year bonds fell more than 3 basis points to 4.029 percent as 30-year bonds fell 2.5 basis points to 4.358.

Investors seemed to ignored positive news on April home sales, and the release of the minutes of the Federal Reserve’s May 3 meeting seemed to have little influence one way or the other.

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