UK bonds create market demand

Yields on US Treasury bonds were mixed on Thursday, with the 2-year bond up 1.2 basis points to 3.635 percent, while yields on the 10-year bond fell 0.6 basis points to 4.084 percent.

Meanwhile in London, the first auction in forty years of 50-year gilts in the UK worth £2.5 billion, received 1.6 times the bids for the amount offered.

This was considered to be a reasonable demand, but one analyst called the average yield at which it sold, 4.21 percent, “expensive” and not a good value.

But prices fell as the day progressed and the yield on the 50-year gilt ended up 3.1 basis points at 4.230 percent.

30-year gilts closed at a yield of 4.332 percent, up 3 basis points, while 10-year gilt was up 3.8 basis points to yield 4.352 percent and the 2-year gilt yielded 4.363 percent, up 3.2 basis points.

In eurozone government bonds, the 2-year Schatz held its previous yield of 2.179 percent while the yield on the 10-year Bund was 3.318 percent, up 0.5 basis points.

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