Most government bonds see yields rise

Prices for government bonds were lower on Thursday in Europe, the UK and the US, leaving Japanese government bonds alone with prices higher and yields lower. The ten-year Japanese government bond dropped 3 basis points to yield 1.650 percent.

In the United States, Treasury bonds saw yields rise after new data showed that the economy grew faster than had been expected in the fourth quarter, at an annual rate of 2.5 percent. The economy had been expected to grow at a 2.2 percent rate. In addition, new unemployment claims were down for the third week in a row. The news sent two-year issues 3 basis points higher to 4.570 percent, while ten-year paper added 0.8 basis points to a yield of 4.632 per cent. An auction of $13 billion in five-year Treasuries was scheduled for later in the day.

In the UK, new data on mortgage lending and retail sales was stronger than had been anticipated, which led to new speculation that interest rates could be going up again soon. The two-year gilt added 4.1 basis points to yield 5.436 percent, while ten-year gilts were yielding 4.946 percent, a gain of 3 basis points.

In the Eurozone, the two-year Schatz was 2.2 percent higher to 3.999 percent, while the ten-year Bund added 0.5 basis points to 4.051 percent. After the president of the European Central Bank said that interest rates there are still accommodative, and after new data showed German unemployment in March was down to its lowest rate in six years, analysts said it was more likely that Eurozone interest rates will rise as high as 4.25 percent by the end of the year.

Story link: Most government bonds see yields rise