US Treasury bond yields lower on home sales data

Price on US Treasury bonds rose after it was reported that new home sales in February in the US were down by 3.9 percent when it had been expected that they would be up by 5.1 percent. The new figures raised worries that slow sales could cause the current troubles in the subprime mortgage sector to spread. The gain in bond prices came after early declines on comments from the president of the Chicago Fed that the housing market was stabilizing and that the problems currently faced by subprime lenders would not affect the larger economy.

At late morning in New York, yields on two-year Treasury bonds were 4.7 basis points lower to 4.564 percent. Meanwhile, ten-year yields were at 4.577 percent, a drop of 4 basis points.

In Europe, yields on Eurozone bonds were up early but went back to near opening levels after the US home sales figures were released. The two-year Schatz ended the session even at a yield of 3.960 percent, while the ten-year Bund added just 0.4 basis points to 4.005 percent.

Yields on UK gilts were up on new data showing home prices up by an annualized 6.7 percent in March. The two-year gilt was 1.3 basis points higher to a yield of 5.397 percent, while ten-year gilts were yielding 4.891 percent, a gain of 0.8 basis points.

In Japan, yields on the ten-year Japanese government bond were up 5 basis points to 1.665 percent.

Story link: US Treasury bond yields lower on home sales data