Bond markets midday

In Japan on Tuesday, the price of government bonds declined early in the day in consequence of the dollar’s rise in relation to the yen, but that decline influenced investors to buy, sending prices higher again later in the day. At the end of the day, 10-year government bonds remained unchanged at a yield of 1.235 percent.

In the eurozone, prices fell and yields were up as figures showed that in Italy saw its biggest gain in industrial output in eight years in April. That gain helped slow speculation that the European Central Bank might lower interest rates soon. Also, inflation slowed its growth in France and Spain in May. This information led the 10-year Bund to advance by 0.9 basis points to yield 3.199 percent.

In the UK, investors began a sell-off after the governor of the Bank of England warned of inflation risks and as consumer price inflation rate data released Tuesday remained steady at 1.9 percent for the third month in a row after analysts had predicted that the figure would fall.

Meanwhile, at mid-day in New York, 2-year Treasury bonds had risen to a yield of 3.70 percent, a gain of 2.7 basis points, and 10-year US bonds had gained 2.7 basis points to yield 4.119 percent. 30-year bonds had risen 3.2 basis points to a yield of 4.408 percent. Investors ignored data showing a drop in retail sales and weaker producer price inflation. These conditions would tend to indicate a slowing of the economy and possible low interest rates that would spur higher bond prices.

Story link: Bond markets midday