Bond yields down as investors seek debt

Yields on government bonds in the Unites States were down and they were up in Japan, but the biggest news in government bond markets on Tuesday came out of Sweden.

By mid-day in New York, yields on 10-year Treasury bonds 5.2 basis points to 4.065 percent. In Japan, 10-year government bond were yielding 1.290 percent, up 0.5 basis points.

In Europe, Sweden’s Riksbank cut interest rates by half a percentage point to 1.5 percent on Tuesday. The cut was not a surprise, but it had only been expected to be a quarter of a percent.

As a result, government bond yields in the eurozone and the UK fell and speculation that the European Central Bank might soon cut rates as well gained new strength.

Yields on the German 10-year Bund were down 8.5 basis points to 3.205 percent and the 10-year gilt in the UK declined by 7.2 basis points to 4.338.

More negative economic news came out of France, where the nation’s economic growth forecast was lowered to no more than 2 percent, down from the earlier figure of 2 to 2.5 percent growth.

In addition, France’s consumer spending fell in May by the largest amount in 10 months. All this bad news did not seem so negative in the Netherlands, however, where a new issue of 10-year bonds worth 4 billion euros was oversubscribed by nearly five times.

Story link: Bond yields down as investors seek debt