Bonds: Traders book profits in periphery bonds after strong run
The following were the yield and basis point (bp) movements of some of the most-watched 10-year bonds this afternoon:
US: 2.34% (-2bp)
UK: 2.37% (-0bp)
Germany: 0.88% (-3bp)
France: 1.24% (-1bp)
Spain: 2.23% (+9bp)
Italy: 2.44% (+5bp)
Japan: 0.49% (-1bp)
Portugal: 3.17% (+15bp)
Greece: 5.76% (+13bp)
Traders took profits after this week's very strong run in debt from Eurozone periphery countries, as the security situation in Ukraine deteriorated again and given a low likelihood of further direct European Central Bank stimulus at next week's policy meeting.
According to estimates from the North Atlantic Treaty Organisation approximately 1,000 Russian troops may now be propping up Ukrainian rebels directly from within the country. Some analysts believe that it is Russia's intention to try and force a stalemate between the rebels and Kiev. The question now is whether the West will respond with further sanctions against the Russian Federation.
US Treasury yields, and those of other leading economies such as France and Germany, were thus actually lower despite the stronger than expected economic reports released on Thursday Stateside.
The rate of growth in the American economy during the second quarter was revised higher to a 4.2% clip, versus the 3.9% initially expected.
US pending home sales grew 3.3% in July (consensus: 0.5%) after a 1.3% month-on-month fall in June.
Spanish consumer prices slipped at a 0.5% year-on-year pace in August (consensus: -0.6%), following a 0.3% drop in the month before.
Germany's consumer price index advanced at a 0.8% year-on-year clip in August, as forecast.
The European Commission's economic confidence gauge for the Eurozone in June fell back to a reading of 100.6 in June (consensus: 101.5), after a print of 102.1 for May.
Italian retail sales were flat over the month in June (consensus: -0.5%).
AB