Gilts down as investors move from safe investments

In the UK, the 2-year gilt was up 5.9 basis points to yield 4.101 percent, while the 10-year gilt rose by 7.1 basis points to a yield of 4.291 percent.

Prices on gilts were down as the stock markets made gains and investors backed off from their search for safe investments after Thursday’s bombings in London.

In the eurozone, the 2-year Schatz rose 4.9 basis points to yield 2.187 percent, while the 10-year Bund rose 4.1 basis points to yield 3.226 percent as good economic news out of France further reduced the possibility of eurozone interest rate cuts in the near future.

In the United States, investors were looking forward to several reports on economic conditions that are expected to be released this week. These reports include retail sales figures, the University of Michigan’s consumer confidence survey, and both consumer and producer inflation figures.

By late morning trade in New York, 10-year US Treasury bonds were up 5.1 basis points to a yield of 4.146 percent after an early sell-off that had yields up to 4.154 percent.

Treasury announced two auctions of new issues, a sale of $9 billion in new 10-year inflation-protected securities, or Tips, as well as an auction of $13 billion in new five-year bonds.

The last time new five-year bonds were auctioned, $14 billion worth were available. These two sales raise the possibility that the deficit will be lower than had been predicted earlier.

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