4 Sep 2013
Bonds yields to the upper side amidst mixed data
FXstreet.com (Athens) -Even amidst Syrian’s jitters, on Tuesday the 10yr UST yields reached a high as of 2.91%, mainly due to solid ISM data.
On Tuesday, the 10yr UST yields reached a high as of 2.91%, mainly due to solid ISM data. This figure is not too far away from the 2.93% high reached on the 22nd of August. However, after the inaccurate Russian news about “rockets launch seen in Mediterranean Sea”, yields back down to the closing level of 2.86% but were still up 8bp on the day. On the other side, the move up in UST yields were a drag on European bond markets while EM assets also suffered. Indeed, yesterday saw the MSCI Emerging Markets equity index (-0.5%) record its first loss in four sessions with particularly sharp falls in Indian (-3.5%) and Turkish (-2.3%) bourses.
What’s more, Australian 3yr government bonds yields extended the post-RBA reaction from 2.86% to 2.94% - a two-month high. The 10yr yield rose from 3.98% to 4.02%. In addition today, Germany sold 5-year bills at 1%, the highest yield since December 2011. European fixed income markets have seen fairly small moves today, while UK yields are generally around 1.5-2bp higher across the curve. GLOBAL ECONOMICS ING FINMKT suggest in their report that “after Euro zone GDP growth was confirmed at 0.3% on a quarterly basis, the recovery story remains fragile. With high unemployment rates and disposable income still under downward pressure, the consumption recovery is largely confidence based. The ECB will therefore have to continue its easy monetary policy, both by keeping its main interest rates at rock bottom levels for some time to come and by “hardening” its forward guidance to prevent the yield curve from steepening further. “
On Tuesday, the 10yr UST yields reached a high as of 2.91%, mainly due to solid ISM data. This figure is not too far away from the 2.93% high reached on the 22nd of August. However, after the inaccurate Russian news about “rockets launch seen in Mediterranean Sea”, yields back down to the closing level of 2.86% but were still up 8bp on the day. On the other side, the move up in UST yields were a drag on European bond markets while EM assets also suffered. Indeed, yesterday saw the MSCI Emerging Markets equity index (-0.5%) record its first loss in four sessions with particularly sharp falls in Indian (-3.5%) and Turkish (-2.3%) bourses.
What’s more, Australian 3yr government bonds yields extended the post-RBA reaction from 2.86% to 2.94% - a two-month high. The 10yr yield rose from 3.98% to 4.02%. In addition today, Germany sold 5-year bills at 1%, the highest yield since December 2011. European fixed income markets have seen fairly small moves today, while UK yields are generally around 1.5-2bp higher across the curve. GLOBAL ECONOMICS ING FINMKT suggest in their report that “after Euro zone GDP growth was confirmed at 0.3% on a quarterly basis, the recovery story remains fragile. With high unemployment rates and disposable income still under downward pressure, the consumption recovery is largely confidence based. The ECB will therefore have to continue its easy monetary policy, both by keeping its main interest rates at rock bottom levels for some time to come and by “hardening” its forward guidance to prevent the yield curve from steepening further. “