Bonds prices mixed on day

With US Federal Reserve chairman Ben Bernanke scheduled to testify on Wednesday before the Joint Economic Committee of Congress, investors were tentative Tuesday as they waited to see if he might expand on the policy statement released by the Fed last week. On the other hand, lower than forecast consumer confidence data didn’t seem to make much difference on the day.

At late morning in New York, yields on two-year Treasury bonds were slightly lower, down 0.9 basis points to 4.581 percent. On the other hand, ten-year paper added 0.4 basis points to a yield of 4.611 percent.

Yields on Eurozone bonds were higher even though the latest Ifo survey of business sentiment out of Germany showed confidence higher than had been anticipated, which made new interest rate hikes from the European Central Bank more likely this year. The two-year Schatz added 1.6 basis points to 3.976 percent, while the ten-year Bund was yielding 4.023 percent, a gain of 0.3 basis points.

In the UK, yields on gilts were higher after comments from the Bank of England’s governor indicated that the possibility of further inflation was uncertain but still a concern. The two-year gilt was 2.5 basis points higher to a yield of 5.415 percent, while ten-year gilts added 2.3 basis points to 4.914 percent.

In Japan, 10-year Japanese government bonds saw yields drop by 2 basis points to 1.645 percent after the Nikkei 225 declined on the session.

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